Our Offices Location

Delhi
Gurugram
Mumbai
Lucknow
Jaipur
Kolkata
Allahabad
PREACH LAW LLP
Kolkata Office at
Chamber No.215, High Court Of Kolkata West Bangal -: 700001
PREACH LAW LLP
Opposite Road No.3, GTI Area,
Sikar Road, Jaipur, Rajasthan - 302013
PREACH LAW LLP
Office at: 805-B, Sector-K,
Ashiana, Lucknow, Uttar Pradesh, India,
PREACH LAW LLP
Office at: Chamber no.-145,
Shaheed Sukhdev Singh Block,
Near Gate No-1,District Court, Gurugram.
PREACH LAW LLP
(Advocates & Attorney)
Reg. Office:E-111-B, Nawada Housing Complex,
Uttam Nagar, New Delhi-110059
PREACH LAW LLP
Antop Hill Ware Housing Co. Limited,
Unit No. C-339, V.I.T. College Road,
Wadala (East), Mumbai - 400 037
PREACH LAW LLP
Allahabad Office at
138-A/1,Ram Priya Road,
Prayag Allahabad, Uttar Pradesh
  • Delhi
    PREACH LAW LLP
    Delhi Office at
    Plot No.B-34, Second Floor, Arjun Park, South West Delhi, New Delhi – 110043, India
  • Gurugram
    PREACH LAW LLP
    Gurugram Office at
    Chamber no.-145, Shaheed Sukhdev Singh Block, Near Gate No-1,District Court, Gurugram.
  • Mumbai
    PREACH LAW LLP
    Mumbai Office at
    Unit No. C-339, V.I.T. College Road,
    Wadala (East), Mumbai - 400 037.
  • Lucknow
    PREACH LAW LLP
    Lucknow Office at
    805-B, Sector-K, Ashiana, Lucknow, Uttar Pradesh, India,
  • Jaipur
    PREACH LAW LLP
    Jaipur Office at
    Opposite Road No.3, GTI Area, Sikar Road, Jaipur, Rajasthan - 302013
  • Kolkata
    PREACH LAW LLP
    Kolkata Office at
    Chamber No.215, High Court Of Kolkata West Bangal -: 700001
  • Allahabad
    PREACH LAW LLP
    Allahabad Office at
    138-A/1,Ram Priya Road, Prayag Allahabad, Uttar Pradesh

Domestic Transfer Pricing

About Domestic Transfer Pricing

Key point of Service:

Help to identify specifically related party transactions and specified domestic transactions stemming between them which comes under Domestic TP purview.
Help in conducting functional and Benchmark analysis
Assistance in developing commercially viable and fiscally efficient TP policies
Assistance in documentation preparation on timely basis as per the Indian TP Regulation

Legal Definition of Domestic Transfer Pricing?
What is Domestic Transfer Pricing? The transfer pricing (TP) provisions were earlier restricted to International transactions only. However, with effect from 1st April 2013 the transfer pricing scope has been extended to specific domestic transactions and is accordingly effective from Assessment Year (A.Y) 2013-14.
Legal Definition of Domestic Transfer Pricing? Section 92BA defines specified domestic transactions which are governed by the TP regulation which states that specified domestic transactions in case of the assessee mean any of the following transactions:--
Any expenditure incurred or to be incurred in connection with a payment made or to be made to a person referred to in section 40A (2) (b).
Transactions referred to in section 80A.
Any transfer of goods or provision of services as provided in subsection 8 of section 80 – IA.
Any business transaction between the assessee and another person as referred to in subsection 8 of section 80 – IA
Any transactions which have been mentioned under section under chapter VI-A or section 10AA, o a person to whom provisions of subsection 8 or subsection 10 of section 80 IA is applicable
And where the aggregate of such transactions entered into by the assessee in the previous year exceeds 20 crores
Any other transactions as may be prescribed
Threshold Limit:
The above provisions shall be applicable only if the aggregate value of the turnover of the above-mentioned transactions exceeds Rs.20 crore (w.e.f. 1st April 2017 i.e. A.Y. 2017-18 onwards) i.e. if the threshold limit has crossed the taxpayer will be required to comply with the TP requirements with reference to all the transactions in spite of the fact that value of the transactions under any of the head may be small. Therefore, there is no threshold for every head of the definition
Applicability of Domestic Transfer Pricing?
Tax Payers cannot apply transfer pricing to specific domestic transactions to reduce the tax liability
Monetary threshold limit of 20 crores is to be calculated on the basis of the aggregate of payments and receipts to which these provisions apply.
Definition of Related party includes expenses disallowed to cover the entities which have common beneficial ownership
Transfer pricing is mostly applicable to international transactions and specified domestic transactions and specifically excludes Advance Pricing Agreement provisions.

Concept of Arm's Length Price (ALP):
The concept of ALP has also been extended to Specified Domestic Transactions. ALP is defined as the price which is applied to proposed to be applied in a transaction the assessed and any other unrelated person in uncontrollable condition

Methods of Computing ALP:
Comparable uncontrolled price method
Resale price method
Cost plus method
Profit Split method
Transactional net margin method
Such other method as may be notified by the Board
Documentation requirements for Domestic Transfer Pricing transactions
Company documents:
Profile of the company
Profile of the group companies
Profile of the unit claiming tax holiday
Profile of all the related parties
Our Services and support:
Identify the transactions: We provide assistance in identifying arrangements that are covered under Specific Domestic Transactions. We help in mapping of the transactions and documenting the current pricing policy
Assessment of Impact: (1) We undertake review of the agreements and the documents on the basis of which price is being charged and paid by the entities. (2) Evaluate the impact on the basis of present pricing policy of the group to analyze and identify whether the transactions are in line with the arm’s length pricing. (3) Technical assessment of the arrangement to evaluate whether Specified Domestic Transactions provisions are applicable or not and establishing ALP for the same
Understand the implication: (1) For the identified Specified domestic transaction undertake a high-level functional analysis of the transactions. (2) If required undertake high level benchmarking analysis. (3) Advice on the SDT compliance/documentation.

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