Transfer Pricing Safe Harbour Rules extended upto AY 2021-22, notifies CBDT

CBDT notifies the ‘Income-tax (30th Amendment) Rules, 2021’ to amend IT Rule 10TD(3B), i.e. to extend applicability of the provisions of sub-rule (1) and (2A), i.e. Transfer Pricing Safe Harbour Rules, upto assessment year 2021-22.

It may be noted that the Income-tax Authorities are supposed to accept the transfer prices declared by the Assessee, to be at arm’s length, in respect of the eligible international transactions prescribed under IT Rules 10TD(1) and (2A).

The concept of Safe harbour rates has been introduced under Transfer pricing mechanism by the Finance Act 2009, whereby Income Tax Dept. keeps a check on the arm’s length pricing of the transactions of a company with it’s own overseas divisions/ units.

Accordingly, the safe harbour rates which were originally notified for a block of four years under sub-rule (3) for AY 2013-14 to 2016-17 and then for 3 years under sub-rule (3A) for AY 2017-18 to 2019-20, were later further extended upto AY 2020-21. Now as per the current extension, these rates shall remain applicable for AY 2021-22 also.

CBDT Income Tax Notification 117/2021 dt. 24/09/2021: Income-tax (30th Amendment) Rules, 2021 notified to amend IT Rule 10D(3B) to extend applicability of Transfer Pricing Safe Harbour Rules, upto assessment year 2021-22

G.S.R. 661(E).- In exercise of the powers conferred by sub-section (2) of section 92CB read with section 295 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 1962, namely:-

1. Short title and commencement.- (1) These rules may be called the Income-tax (30th Amendment) Rules, 2021.

(2) They shall be deemed to have come into force from 01/04/2021.

2. In the Income-tax Rules, 1962, in rule 10TD, in sub-rule (3B), for the words and figures “assessment year 2020-21”, the words and figures “assessment years 2020-21 and 2021-22” shall be substituted.

Explanatory Memorandum: It is hereby certified that no person is being adversely affected by giving retrospective effect to these rules.

Note : The principal rules were published in the Gazette of India, Extraordinary, Part-II, section-3, sub-section (ii) vide number S.O. 969 (E) dated 26/03/1962 and were last amended vide notification number GSR 627(E) dated 13/09/2021.

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