CBDT vide Notification No. 117/2021 dated 24.09.2021 in G.S.R. 661(E) has extended the validity of safe harbour provisions for transfer pricing issues of Rule 10TD(1) & Rule 10(2A) till Assessment Year 2021-22. Rule 10TD prescribes a list of eligible international transactions where the transfer price declared by the assessee shall be required to be accepted by the Income-tax Authorities.
CBDT has kept the same rates for AY 2021-22 as it was prevalent in AY 2020-21.
As per the notification, the rates applicable from FY 2016-17 to FY 2018-19, and later extended to FY 2019-20, will continue to apply for FY 2020-21 as well. Like last year, this year again, the rates have been prescribed for one year only, instead of a period of three years and five years earlier.
Rule 10TD(1) and Rule 10TD(2A) prescribe a list of eligible international transactions where income-tax authorities shall accept the transfer price declared by the taxpayer at arm’s length.
Sub-rule (3A) to Rule 10TD provides the time limit for the applicability of Rules 10TD(1) and 10TD(2A). It provides that provisions shall apply for the Assessment Year 2017-18 and the following two Assessment Years. In other words, it shall apply for thee AYs 2017-18 to 2019-20. Later the Board has inserted a new sub-rule 3B to the Rule 10TD to extend the applicability to AY 2020-21.
The Board has now amended Rule 10TD(3B) to further extend the applicability Rule 10TD till Assessment Year 2021-22.
Read the full text of Notification No. 117/2021 dated 24.09.2021 on Extension of Validity of Safe Harbour rules till AY 2021-22
MINISTRY OF FINANCE
(Department of Revenue)
(CENTRAL BOARD OF DIRECT TAXES)
NOTIFICATION
New Delhi, the 24th September, 2021
INCOME-TAX
G.S.R. 661(E).—In exercise of the powers conferred by sub-section (2) of section 92CB read with section 295 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 1962, namely:___
1. Short title and commencement. - (1) These rules may be called the Income-tax (30th Amendment) Rules, 2021.
(2) They shall be deemed to have come into force from the 1st day of April, 2021.
2. In the Income-tax Rules, 1962, in rule 10TD, in sub-rule (3B), for the words and figures “assessment year 2020-21”, the words and figures “assessment years 2020-21 and 2021-22” shall be substituted.
[Notification No. 117/2021/F. No. 370142/44/2021-TPL]
NEHA SAHAY, Under Secy. (Tax Policy and Legislation)
Explanatory Memorandum : It is hereby certified that no person is being adversely affected by giving retrospective effect to these rules.
Note : The principal rules were published in the Gazette of India, Extraordinary, Part-II, section-3, sub-section (ii) vide number S.O. 969 (E) dated the 26th March, 1962 and were last amended vide notification number GSR 627 (E) dated the 13th September, 2021.
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