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Informist, Tuesday, Oct. 29, 2024

 

NEW DELHI – The Central Board of Direct Taxes has notified the tolerance range for transfer pricing for Assessment Year 2024-25 (Apr-Mar). The board has notified a transfer pricing tolerance range of 1% for international and specified domestic transactions, while a 3% tolerance range has been set for other transactions.

 

"The tolerance ranges shall be 1% for transactions in the nature of 'wholesale trading' and 3% for others, respectively, as notified last year," the CBDT said in a release. 'Wholesale trading' is defined as an international transaction or specified domestic transaction of trading in goods where the purchase cost of finished goods is 80% or more of the total cost pertaining to such trading activities, and average monthly closing inventory of goods is 10% or less of sales pertaining to such trading activities.

 

"The notification of tolerance range suggested that it shall provide certainty to taxpayers and reduce the risk perception associated with pricing of a transaction in transfer pricing," Nitin Narang, partner-transfer pricing, Nangia & Co LLP, said. "Similar to preceding years, no specific reason or clarification is given in relation to why a different tolerance limit is set for wholesale traders and others, and how the range of 3% has been determined," Narang added.  End

 

Reported by Shubham Rana

Edited by Rajeev Pai

 

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