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Transfer Pricing


Increasing participation of multi-national groups in economic activities in the country has given rise to new and complex issues emerging from transactions entered into between two or more enterprises belonging to the same multi-national group. With a view to provide a detailed statutory framework which can lead to computation of reasonable, fair and equitable profits and tax in India, government has incorporated various acts keeping in mind various aspects in this relation.

In the case of multinational enterprises, the Finance Act, 2001 substituted section 92 with a new section and introduced new sections 92A to 92F in the Income-tax Act, relating to computation of income from an international transaction in relation to the arm's length price, meaning of associated enterprise, meaning of information and documents by persons entering into international transactions and definitions of certain expressions occurring in the said section.

Arm's length price: In accordance with internationally accepted principles, it has been provided that any income arising from an international transaction or an outgoing like expenses or interest from the international transaction between associated enterprises shall be computed having regard to the arm's length price, which is the price that would be charged in the transaction if it had been entered into by unrelated parties in similar conditions. The arm's length price shall be determined by one of the methods specified in Section 92C in the manner prescribed in Rules 10A to 10C.

Arm's length priced can be calculated by one of the specified methods

The taxpayer can select the most appropriate method to be applied to any given transaction, but such selection has to be made taking into account the various factors prescribed in the Rules. With a view to allow a degree of flexibility in adopting an arm's length price, section 92C provides that where the most appropriate method results in more than one price, a price which differs from the arithmetical mean by an amount not exceeding five percent of such mean may be taken to be the arm's length price, at the option of the assessee

Services We Offer

Transfer Pricing Solutions

We at ledger Services. have skilled team of tax practitioners and financial analysts who focus on reducing threats and increasing opportunities to enhance corporate performance through proactive transfer pricing planning.

As part of our transfer pricing service, we offer advice and assistance in the following areas :

  • Transfer Pricing Planning
  • Compliance and Documentation
  • Controversy Resolution
  • Managing Risk
  • Integrated Tax Planning
To see how Ledger can help you in , get in touch with us at contact@ledger.in or call us at 080-41692691 or Click here

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