What is Transfer Pricing ?
Transfer Pricing is the price at which an enterprise transfers physical goods and intangibles or provides services to associated enterprises. It is an accepted principle that transactions between related parties should be based upon the same terms as between unrelated parties.
Introduction of Transfer Pricing- International Transactions ?
The Finance Act 2001 introduced the new Transfer Pricing regulations in India w.e.f. 1 April 2001 by substituting the existing section 92 with new a set of sections from 92 to 92F in the Act and a relevant set of rules 10A to 10E. Accordingly, Assessment Year (’A.Y.’) 2002-03 was the first year of TP Assessment.
Introduction of Transfer Pricing- Specific Domestic Transactions ?
The Finance Act, 2012 has extended the scope of Transfer Pricing (TP) provisions to Specified Domestic Transactions (SDT) as well. The provisions apply from the Financial Tear 2012-13 if the Transaction undertaken by the Taxpayer falls within the meaning of “Specified Domestic Transactions”.
What do we mean by Arm’s Length Price?
Arm’s Length Price means a Price which is applied or proposed to be applied in a Transaction between persons other than Associated Enterprises, in uncontrolled conditions.