CBDT Issues Tolerance Range Notification for Transfer Pricing (A.Y 2024-25)
đź“… Date: October 29, 2024
đź“‚ Categories: #CBDTNotification #PressRelease
⌛ Read Time: 4 Min
The Central Board of Direct Taxes (CBDT) has issued Notification No. 116/2024, dated October 18, 2024, specifying the tolerance range for Transfer Pricing assessments for Assessment Year (A.Y) 2024-25. This notification, per the proviso to sub-rule (7) of rule 10CA of the Income-tax Rules, 1962, aims to provide more clarity for taxpayers and minimize potential pricing disputes in transfer pricing.
🔹 Key Highlights:
The tolerance range is 1% for transactions categorized as “wholesale trading” and 3% for all other transactions, consistent with previous guidelines.
Definition of Wholesale Trading: Includes trading activities in which the purchase cost of finished goods is 80% or more of total trading costs and average monthly closing inventory is 10% or less of sales.
By establishing these tolerance ranges, the CBDT seeks to bring stability and reduce compliance risks associated with transfer pricing evaluations.
CBDTUpdate #TransferPricing #TaxCompliance #IndiaTaxation
