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    Role of the Transfer Pricing Officer in Ensuring Arm’s Length Compliance : Clause 166 of the Incom...
    Reframing Arm's Length Pricing in India's Evolving Transfer Pricing Regime : Clause 165 of the Incom...
    Meaning of Specified Domestic Transactions under Clause 164 of Income Tax Bill, 2025 Vs. Section 92B...
    Meaning of International Transaction : Clause 163 of the Income Tax Bill, 2025 Vs. Section 92B of th...
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    Remuneration and interest received by an individual partner from a partnership firm can be subjected...
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    Computation of income arising from international transactions and specified domestic transactions : ...
    Future of Unilateral Agreement relief in India : Clause 160 of the Income Tax Bill, 2025 Vs. Section...
    Streamlining Double Taxation Relief and International Tax Agreements : Clause 159 of Income Tax Bill...
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    Addressing Cross-Border Taxation of Foreign Retirement Benefits : Clause 158 of Income Tax Bill, 202...
    Continuity and Reform in Tax Relief for Irregular Income : Clause 157 of the Income Tax Bill, 2025 V...
    Constitutional Limits on GST: Principle of mutuality insulates transactions between clubs/associatio...
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    The Structure and Implications of Income Tax Rebates : Clause 155 of the Income Tax Bill, 2025 Vs. S...
    Analyzing the Tax Treatment of Collective Entities under Clause 310 of Income Tax Bill, 2025 Vs. Sec...
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    Statutory deduction for interest income derived from deposits : Clause 153 of the Income Tax Bill, 2...
    Patent Royalty Deduction Scheme to Boost Innovation and R&D in India : Clause 152 of the Income Tax ...
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    Act RulesBills
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    Arm's length pricing: multi year ALP option expands certainty and permits roll forward of transfer pricing determinations.
    Clause 166 authorises the Assessing Officer to refer international and specified domestic related party transactions to a Transfer Pricing Officer for determination of the arm's length price, subject to prior approval; mandates notice, hearing, prescribed transfer pricing methods, and communication of the TPO order to AO and assessee; empowers the TPO to examine unreported transactions and to validate a taxpayer's option to apply a determined ALP to similar subsequent years, with rectification powers and corresponding AO amendment obligations, and permits issuance of Board guidelines to implement the multi year regime.
    Act RulesBills
    Show AI Summary
    Arm's length price determination: new clause refines methods and AO powers, emphasizing documentation and prescribed procedures.
    Determination of Arm's Length Price requires selecting the most appropriate method from prescribed alternatives based on the transaction's nature, associated enterprise class, and functional analysis; where a single comparable price is found it is the arm's length price subject to a prescribed tolerance, while multiple prices must be reconciled in a prescribed manner. The tax authority may determine ALP during assessment if methods were not followed or documentation is inadequate, but must issue a show cause notice before adjustment; adjustments permit recomputation of total income and restrict deductions on enhanced income, with safeguards to prevent double adjustment.
    Act RulesBills
    Show AI Summary
    Specified domestic transaction: extending transfer pricing to high-value related-party domestic dealings, subject to arm's length compliance.
    Clause 164 defines specified domestic transaction by enumerating categories of non-international related-party dealings brought under transfer pricing when aggregate annual value exceeds a high-value threshold, includes a residual prescription power to notify additional transactions, and requires contemporaneous documentation and benchmarking to ensure compliance with the arm's length principle.
    Act RulesBills
    Show AI Summary
    International transaction scope expanded broadens transfer pricing coverage to intangibles and indirect dealings, including restructuring and financing arrangements.
    Clause 163 defines international transaction expansively to include tangible and intangible property (expressly including transfer), capital financing, services, business restructuring, cost sharing and any transaction affecting profits, income, losses or assets; it reproduces an illustrative list of intangibles and contains a deeming rule treating dealings with third parties as international transactions where terms are determined with or pursuant to an associated enterprise, thereby widening transfer pricing coverage and anti avoidance reach.
    Case LawsIncome Tax
    Show AI Summary
    Presumptive taxation: partner remuneration and interest cannot be treated as individual business turnover for presumptive tax purposes.
    Section 44AD applies only where the assessee carries on an eligible business and has actual turnover or gross receipts attributable to that assessee. Remuneration and interest paid by a partnership firm to a partner arise from the firm's accounts and partnership agreement; although Section 28(v) taxes such receipts in the hands of the partner, that deeming does not convert them into the partner's turnover or gross receipts for Section 44AD. Section 40(b) governs firm deductibility but does not create an independent business activity in the partner; hence such receipts cannot be subjected to Section 44AD presumptive taxation.
    Act RulesBills
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    Associated enterprise definition expands transfer pricing scope to include specified domestic transactions and indirect control.
    Clause 162 defines associated enterprise through a general limb covering direct or indirect participation in management, control or capital and a list of deeming provisions-equity thresholds, significant loans and guarantees, board control, dependence on intangibles, supply and sales dependence, and familial/HUF control-while expressly extending the concept to specified domestic transactions and retaining prescribed catch-all and subjective influence tests that may require further guidance.
    Act RulesBills
    Show AI Summary
    Arm's length price requirement drives transfer pricing adjustments to prevent profit shifting and protect the tax base.
    Clause 161 mandates computation of income and the allowance of expenses or interest for international and specified domestic transactions among associated enterprises with reference to the arm's length price, requires arm's length allocation for shared costs or services, and prohibits transfer pricing adjustments that would reduce taxable income or increase losses, thereby strengthening scrutiny of intra group cost allocations and deductions to prevent profit shifting.
    Act RulesBills
    Show AI Summary
    Unilateral double taxation relief limits credit to the lower of domestic or foreign tax rates and requires proof of foreign tax payment.
    Clause 160 provides unilateral relief for Indian residents and non-resident partners taxed on foreign income where no DTAA exists, limited to the lower of the Indian tax rate or the foreign tax rate, requires proof of foreign tax payment, and defines key terms to include excess profits or business profits taxes; it modernizes terminology and omits a prior country-specific carve-out, while raising evidentiary and computational ambiguities.
    Act RulesBills
    Show AI Summary
    Double taxation relief framework modernised: new clause clarifies treaty adoption, anti abuse safeguards, and documentation requirements.
    Clause 159 empowers the Central Government to enter into and adopt agreements with foreign countries and notified specified territories, and permits specified domestic associations to enter into sectoral agreements subject to governmental adoption and notification. Agreements may provide relief from double taxation, avoidance of double taxation constrained by anti abuse safeguards, exchange of information to prevent evasion, and mutual assistance in tax recovery. The Act's provisions apply to the extent more beneficial to the taxpayer, but anti abuse measures in Chapter XI apply notwithstanding such benefit. Non residents must furnish a certificate of residence and prescribed documentation to claim treaty relief.
    Act RulesBills
    Show AI Summary
    Treaty interpretation and anti-abuse primacy clarified: government may adopt association agreements while preserving treaty benefit limits.
    Clause 159 authorises the Central Government to enter into agreements with foreign countries or notified territories and to adopt agreements between notified specified associations for double taxation relief, exchange of information, and mutual assistance in recovery. Taxpayers may claim the more beneficial of domestic law or a notified agreement, subject to documentary requirements for non-residents and the primacy of chapter-level anti-abuse provisions. A four-tier interpretive hierarchy for treaty terms is provided, with retrospective effect from the agreement's commencement.
    Act RulesBills
    Show AI Summary
    Relief from taxation on foreign retirement accounts aligns Indian tax timing with foreign withdrawal taxation to prevent double taxation.
    Clause 158 aligns Indian taxation of income from foreign retirement accounts with the foreign tax event by restricting relief to specified accounts in notified countries opened while the taxpayer was non resident, and by delegating timing and procedural details to rules to prevent double taxation, address timing mismatches, and guard against abuse.
    Act RulesBills
    Show AI Summary
    Relief for irregular salary receipts: claim based allocation to prior years with computation and procedures delegated to rules.
    Clause 157 provides relief where lump sum receipts (arrear or advance salary, salary for over twelve months, profits in lieu of salary, and arrears of family pension) cause an assessment at a higher rate. Relief is claim based on application to the Assessing Officer and requires allocation of amounts to earlier years; the Assessing Officer grants relief as prescribed in rules. An anti abuse exclusion denies relief where a deduction for the same amount has already been claimed, and computation, procedural steps and particulars (e.g., Form 10E practice) are to be specified by rules.
    Case LawsGST
    Show AI Summary
    Mutuality doctrine shields club-member transactions from GST; statutory deeming fiction held unconstitutional, retrospective levy invalid.
    The Kerala High Court held that the doctrine of mutuality insulates transactions between an association and its members from GST because the concepts of "supply" and "service" require distinct persons; statutory deeming provisions treating associations and members as separate persons are ultra vires Article 246A and related constitutional provisions, and retrospective application of those amendments is invalid as unfair and contrary to the rule of law.
    Act RulesBills
    Show AI Summary
    Rebate for resident individuals: expanded two-tier relief and tapered withdrawal to avoid abrupt tax cliffs.
    Clause 156 creates a two-tier rebate: a general rebate for resident individuals below a base threshold and an enhanced rebate for taxpayers opting into the new tax regime with a higher threshold and larger maximum rebate. The enhanced rebate includes a tapering mechanism for incomes above its threshold and an express cap preventing the rebate from exceeding actual tax liability, with computation rules tied to the new-regime tax rates.
    Act RulesBills
    Show AI Summary
    Rebate allowance framework modernisation - rebates applied after tax computation and capped to prevent negative tax liability.
    Allowance of rebates is enabled by Clause 155, which permits rebates to be deducted from income-tax computed on total income after tax computation and before other chapter deductions, and caps aggregate rebates so they cannot exceed the tax computed prior to rebates; the substantive conditions and limits are delegated to Section 156.
    Act RulesBills
    Show AI Summary
    Taxation of member's share: entity-level tax exempts members, unless the entity is untaxed or taxed below top rate.
    Clause 310 establishes that a member's share of income from an AOP/BOI is exempt from tax in the member's hands when the association/body is taxed on that income; if the AOP/BOI is not chargeable to tax the member's share is taxed in the member's hands; and if the AOP/BOI is taxed at the maximum marginal rate the member's share is excluded from his total income, otherwise the member's share is included in his total income.
    Act RulesBills
    Show AI Summary
    Deduction for disability: standardized tax relief retained with mandatory medical certification and prescribed certificate submission.
    Clause 154 allows resident individuals certified by a medical authority as persons with disability or severe disability to claim a fixed deduction, contingent on furnishing the prescribed certificate with the return and on certificate validity and reassessment rules; definitions are cross referenced to a Bill provision for consistency.
    Act RulesBills
    Show AI Summary
    Deduction for interest on deposits expanded to include senior citizens and time deposits, consolidating small-saver relief.
    Clause 153 provides a statutory deduction for interest on deposits to individuals, senior citizens, and HUFs, specifying eligible institutions (banks, cooperative banking societies, and post offices), preserving denial of deductions for interest held by or on behalf of firms, AOPs, or BOIs, and defining time deposits. It consolidates prior disparate provisions by including senior citizens within the same clause with expanded coverage for time deposits, while maintaining the existing deduction treatment for non senior individuals and HUFs.
    Act RulesBills
    Show AI Summary
    Patent royalty deduction for resident inventors: capped, certified relief tied to repatriated foreign receipts and compulsory licence limits.
    Clause 152 provides a statutory deduction for resident individual patentees in respect of royalty from patents registered on or after 1 April 2003, subject to a statutory annual ceiling and procedural certification. Deductions in compulsory licence cases are limited to Controller determined royalty; foreign-sourced receipts qualify only to the extent repatriated in convertible foreign exchange within the prescribed period and supported by prescribed certification. Definitions exclude capital gains and sales proceeds from the scope of "royalty," and certification by prescribed authorities is required with the return.
    Act RulesBills
    Show AI Summary
    Deduction for authors' royalty income limited by a fixed cap and repatriation plus certification requirements.
    Clause 151 grants a deduction to resident individual authors for professional income from copyright assignment or royalties for literary, artistic, or scientific books (excluding textbooks), subject to a fixed monetary cap and a royalty to sales limit for non lump sum receipts. Foreign income qualifies only if repatriated in convertible exchange within a prescribed period and accompanied by prescribed certification, and claimants must submit payer verified certificates with returns; double deduction for the same income is expressly prohibited.

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      Review of Customs duty Exemptions - Review of conditional exemption rates of BCD

      24 July, 2024

      Contents
      Notifications
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      Union Budget 2024-25 (Full) + FINANCE (No.2) Bill, 2024

      (i) The BCD exemption for the goods covered under following serial numbers of the notification are being extended upto 31st March, 2026 unless specified otherwise.

      S. No.

      S N of 50/17-Cus

      Brief Description

      1.

      17

      Specified Planting materials, namely, oilseeds, seeds of vegetables, tubers, etc.

      2.

      80A

      Algal oil for manufacturing of aquatic feed

      3.

      90

      Lactose for use in manufacture of homeopathic medicines

      4.

      104

      Specified goods used in processing of sea-food

      5.

      133

      Gold ores and concentrates

      6.

      139

      Bunker Fuels namely: (i). IFO 180 CST; (ii). IFO 380 CST; (iii). VLSFO (CTH 27)

      7.

      150

      Naphtha for manufacture of Fertilisers (scope of exemption is being reduced only to Naphtha)

      8.

      155

      Liquefied petroleum gases (LPG) received from unit in SEZ and returned by the DTA unit to the SEZ unit

      9.

      164

      Electrical energy supplied from SEZ unit to DTA

      10.

      165

      Electrical energy supplied from SEZ to DTA

      11.

      172

      Specified goods used in manufacture of silicon wafers or solar wafers, for manufacture of solar cell or module

      12.

      183

      Medical use fission Molybdenum-99 (Mo-99) for use in manufacture of radio pharmaceuticals

      13.

      184

      Pharmaceutical Reference Standard

      14.

      188

      Goods for manufacture of ELISA Kits

      15.

      191

      Maltol for manufacture of deferiprone

      16.

      204

      Anthraquinone or 2-Ethyl Anthraquinone for use in manufacture of Hydrogen peroxide

      17.

      237

      Specified material for manufacture of EVA (Ethylene Vinyl Acetate) sheets or backsheet, which are used in the manufacture of solar photovoltaic cells or modules (Scope of materials which can be imported is being increased)

      18.

      253

      Specified Goods for manufacture of Brushless Direct Current (BLDC) motors

      19.

      257

      Tags, labels, stickers, belts, buttons, hangers or printed bags, imported by bonafide exporters

      20.

      257A

      Specified goods used in manufacture of handicraft items for export when imported by bonafide exporter

      21.

      257B

      Specified goods used in manufacture of textile or leather garments for export when imported by bonafide exporter

      22.

      257C

      Specified goods used in manufacture of leather or synthetic footwear or other leather products for export when imported by bonafide exporter

      23.

      258

      Security fibre, threads, Paper based Taggant, M-feature for use in manufacture of security paper by Security Paper Mill, Hoshangabad and Bank Note Paper Mill India Pvt Ltd, Mysore.

      24.

      259

      Raw materials for manufacture of security fibre and security thread for supply to Security Paper Mill, Hoshangabad and Bank Note Paper Mill India Pvt. Ltd, Mysore for use in manufacture of security paper

      25.

      260

      Goods for the manufacture of specified orthopedic implants (902110)

      26.

      261

      Raw material for manufacture of Copper-T Contraceptive

      (i) Alatheon

      (ii) Copper Wire

      27.

      265

      Capacitor grades polypropylene granules for manufacture of Capacitor grade plastic

      28.

      269

      Super absorbent polymer for manufacture of adult diapers and specified goods

      29.

      271

      Polytetrametylene ether glycol, (PT MEG) for use in manufacture of spandex yarn

      30.

      276

      Ethylene- propylene- non-conjugated diene rubber (EPDM) for manufacture of insulated wire and cables

      31.

      279

      New or retreated Pneumatic tyres of rubber for use in servicing, repair of maintenance of aircrafts used for operating scheduled air transport service or scheduled air cargo service etc

      32.

      280

      New or retreated Pneumatic tyres of rubber for use in servicing, repair or maintenance of aircraft imported or procured by Aero Club of India/ for flying training purpose/ operating non-scheduled (passenger or charter) services/ AAI for flight calibration purpose

      33.

      290

      Wood pulp for manufacture of newsprint, paper or paperboard

      34.

      292

      Goods imported for manufacture of paper, paper boards, newsprint

      35.

      293A

      Newsprint and uncoated paper imported for printing of newsprint

      36.

      296A

      Lightweight coated paper imported by actual users for printing of magazines

      37.

      326

      Hydrophilic /Hydrophobic Non- Woven, imported for use in the manufacture of Adult Diapers

      38.

      329

      Pile fabrics for the manufacture of toys

      39.

      333

      Moulds, tools and dies, for the manufacture of parts of electronic components or electronic equipment

      40.

      334

      (i) Graphite Felt or Graphite pack for growing silicon ingots (ii) Thin Steel wire used in wire saw for slicing of silicon wafers

      41.

      345A

      Simply Sawn Diamonds

      42.

      364A

      Spent catalyst or ash containing precious metals

      43.

      368

      Ferrous Scrap

      44.

      374

      Magnesium Oxide (MgO) coated cold rolled steel coils for use in manufacture of cold rolled grain oriented (CRGO) steel

      45.

      375

      Specified items for manufacture of cold rolled grain-oriented steel (CRGO) steel

      46.

      378

      Metal parts for manufacture of electrical insulators falling under heading 8546

      47.

      379

      Pipes and tubes for use in manufacture of boilers

      48.

      380

      Forged steel rings for manufacture of special bearings for use in wind operated electricity generators

      49.

      381

      Flat copper wire for use in the manufacture of photo voltaic ribbon for manufacture of solar photovoltaic cell or modules

      50.

      392

      Dies for drawing metal, where imported after repairs from abroad

      51.

      403

      Parts and raw materials for offshore oil exploration

      52.

      404

      Specified items including capital goods and raw materials for off shore oil exploration

      53.

      415

      Parts for manufacture of catalytic convertors

      54.

      415A

      Platinum or Palladium for manufacture of Noble Metal Compounds & Noble Metal Solutions

      55.

      416

      Ceria zirconia compounds for use in the manufacture of washcoat for catalytic converters

      56.

      417

      Cerium compounds for use in the manufacture of washcoat for catalytic converters

      57.

      418

      Zeolite for use in the manufacture of washcoat for catalytic converters

      58.

      422

      Machinery, electrical equipment for use in semiconductor wafer and LCD

      59.

      423

      Machinery, electrical equipment for use in marking and packaging of semiconductor chips

      60.

      426

      Specified goods for the manufacture of semiconductor devices, memory card, IC, solar cell

      61.

      435

      Capital goods for printing industry

      62.

      442

      Bushings made of Platinum and Rhodium alloy when imported in exchange of worn out or damaged bushings exported out of India

      63.

      446

      Parts and components for manufacture of tunnel boring machines

      64.

      451

      Evacuated tubes with three layers of solar selective coating for use in manufacture of solar water heater

      65.

      462

      Ball screws for use in the manufacture of CNC Lathes

      66.

      463

      Linear Motion Guides for use in the manufacture of CNC Lathes

      67.

      464

      CNC Systems for use in the manufacture of CNC Lathes

      68.

      464A

      Goods for manufacture of plastic processing machineries

      69.

      467

      Parts and components of cash dispenser or automatic bank note dispenser

      70.

      468

      Parts for manufacture of Micro ATM, Fingerprint reader/scanner, Iris scanner, Miniaturised POS (Scope of exemption is being limited to import of raw materials only)

      71.

      471

      All parts for use in the manufacture of LED lights

      72.

      472

      All inputs for use in the manufacture of LED driver or MCPCB for LED lights

      73.

      476

      Television equipment, cameras etc for taking films, imported by a foreign film unit or television team

      74.

      477

      Filming equipment of foreign origin if imported into India after having been exported therefrom.

      75.

      480

      Goods imported for being tested in specified test centers

      76.

      489B

      Goods for manufacturing of Microphones

      77.

      504

      Parts and Components of Digital Still Image Video Cameras

      78.

      509

      Parts, components and accessories for manufacture of Digital Video Recorder

      79.

      510

       Parts, components and accessories for use in manufacture of reception apparatus for television

      80.

      511

      Parts, components and accessories for manufacture of CCTV Camera

      81.

      512

      Specified Parts, components and for use in manufacture of Lithium-ion battery and battery pack

      82.

      512A

      Inputs, parts or sub-parts for use in the manufacturing of Printed Circuit Board Assembly

      83.

      515A

      Open Cell for manufacture of TV Panel

      84.

      516

      The following goods for use in the manufacture of Liquid Crystal Display (LCD) /LED TV Panel

      85.

      517

      Magnetrons for manufacture of domestic microwave ovens

      86.

      519

      Raw materials or parts for use in manufacture of e-Readers

      87.

      523A

      Parts, sub-parts, inputs or raw material for use in manufacture of Lithium-ion cells

      88.

      527

      Lithium-ion cell use in manufacture of battery or battery pack

      89.

      527A

      Lithium-Ion Cell for use in manufacture of battery or battery pack of cellular mobile

      90.

      527B

      Lithium-Ion Cell manufacture of battery or battery pack of EV

      91.

      534

      Parts of gliders or simulators of aircrafts (excluding rubber tyres and tubes of gliders)

      92.

      535

      Raw materials for manufacture of aircraft and parts of aircraft

      93.

      535A

      Parts of aircraft for manufacture of aircraft or for manufacture of parts of aircraft by PSU under Min of Defence

      94.

      536

      Parts, testing equipment, tools and tool-kits for maintenance, repair, and overhauling of aircraft, components or parts of aircrafts

      95.

      537

      All goods of Heading 8802 (except 88026000-spacecraft)

      96.

      538

      Components or parts, including engines, of aircraft of heading 8802

      97.

      539

      (a) Satellites and payloads; (b) Ground equipment brought for testing of (a)

      98.

      539A

      Scientific and technical instruments etc for launch vehicles and satellites

      99.

      540

      Specified goods imported by scheduled air transporter

      100.

      542

      Specified goods imported by Aero Club, Flying Training Institutes

      101.

      543

      Specified goods imported by non-scheduled air transporter

      102.

      544

      Parts (other than rubber tubes), of aircraft of heading 8802

      103.

      546

      Parts (other than rubber tubes), of aircraft of heading 8802

      104.

      548

      Barges or pontoons imported along with ships

      105.

      551

      Cruise ships, Excursion ships

      106.

      553

      Fishing vessels, Tugs and Pusher crafts, light vessels excluding vessels and floating structure imported for break up

      107.

      555

      Vessels like warships, lifeboats excluding vessels and floating structure imported for break up

      108.

      567

      Stainless steel tube and wire, for manufacture of Coronary stents /artificial valve

      109.

      569

      Parts required for manufacture of Ostomy products

      110.

      570

      Medical and surgical instruments, apparatus and appliances including spare parts and accessories thereof

      111.

      575

      Specified Hospital Equipment for use in specified hospitals

      112.

      578A

      Raw materials, for the manufacture of Cochlear Implants

      113.

      580

      X-Ray Baggage Inspection Systems and parts thereof

      114.

      581

      Portable X-ray machine / system

      115.

      583

      Parts and cases of braille watches, for the manufacture of Braille watches

      116.

      591

      Parts of electronic toys

      117.

      593

      Parts of video games for the manufacture of video games

      Note: Description of entries is indicative. Notification may be referred to for complete description.

      (ii) The BCD exemption for the goods covered under following serial numbers of the notification no 50/2017-Customs is being extended upto 31st March 2029.

      S. No.

      S. No. of 50/2017Cus

      Brief Description

      1.

      212A

      Medicines/drugs/vaccines supplied free by United  Nations International Children's Emergency Fund (UNICEF), Red Cross etc

      2.

      213

      Drugs and materials

      3.

      428

      Specified goods imported by accredited press cameraman

      4.

      429

      Specified goods, imported by accredited journalist

      5.

      549

      Capital goods, raw materials and spares for repairs of ocean-going vessels

      6.

      550

      Spare parts and consumables for repairs of ocean going vessels registered in India.

      7.

      577

      Lifesaving medical equipment for personal use

      8.

      607

      Life Saving drugs like Keytruda etc

      9.

      607A

      Lifesaving drugs/medicines for personal use

      10.

      611

      Archaeological artefacts for exhibition in a museum

      11.

      612

      Specified raw material for sports goods

      Note: Description of entries is indicative. Notification may be referred to for complete description.


      Full Text:

      Union Budget 2024-25 (Full) + FINANCE (No.2) Bill, 2024

      Topics

      ActsIncome Tax