Safe harbour rules enable acceptance of declared transfer prices or income to standardise tax compliance and reduce disputes.

Power is conferred on the Board to prescribe safe harbour rules governing income determination under section 9(2) and arm's length price under sections 165 and 166; where determinations of transfer price or declared income by an assessee fall within those rules, the income-tax authorities shall accept them, and the Board may make rules defining the circumstances and procedural effects of such safe harbour.

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