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Frequently Asked Questions

Transfer Pricing refers to the pricing of international or specified domestic transactions between related entities. As per the Income Tax Act, such transactions must be conducted at Arm’s Length Price (ALP) and supported with proper TP documentation.

Any taxpayer who has entered into international transactions or specified domestic transactions with related parties must obtain a TP Report certified by a Chartered Accountant.

A TP Notice reply must include supporting documents, TP study report, comparables analysis, and justification of Arm’s Length Price. Proper drafting and timely submission are essential to avoid penalties.

DRP (Dispute Resolution Panel) is a mechanism for resolving disputes in transfer pricing cases. Taxpayers can file objections before DRP against draft assessment orders within the prescribed time limit.

Failure to maintain TP documentation, file TP report, or respond to TP notices may result in heavy penalties, additions to income, and prosecution under the Income Tax Act.
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