In order to align transfer price calculations with
that of international best practices, Government is going to incorporate “range
concept”.
The government on Tuesday notified amendments to the
transfer pricing rules to incorporate a "range concept" to align
transfer price calculations with that of international best practices.
The amended regime will be applicable for computation
of arms length pricing (ALP) of international transactions and specified
domestic transactions undertaken on or after April 1, 2014, a finance ministry press release
states.
It will enhance the reliability of the analysis used
for the computation of ALP. It will begin with the 35th percentile and end with
the 65th percentile of the comparable prices.
Ruchi Anand and Associates is prominent
tax consultants in India, who provide services that include audit services,
company registration, risk advisory services, etc.
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