New tolerance limits under section 92C deem small price differences arm's-length for AY 2025-26 in transactions

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Full Text of the Document

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....The government notifies that for assessment year 2025-26 an international or specified domestic transaction's actual price will be deemed the arm's-length price if the difference between the arm's-length price under section 92C and the actual transaction price does not exceed 1% of the actual price for wholesale trading and 3% for all other cases. Wholesale trading is defined by (a) finished goods purchase cost ≥80% of total trading costs and (b) average monthly closing inventory ≤10% of related sales. The explanatory memorandum states the tolerance ranges and that no one will be adversely affected by retrospective application.....