India’s Transfer Pricing Regime

Key changes under the Income‑tax Act, 2025 and Rules impacting Intra-group Pricing and Compliance

With the enactment of the Income‑tax Act, 2025 (‘New Act’), together with the Income‑tax Rules, 2026 (‘New Rules’), several changes have been introduced to India’s transfer pricing framework. Notably, while some of these amendments have been positioned as mere simplifications of the existing law, a closer analysis suggests that the implications may be wider and significant.

The changes include rationalization of the Safe Harbour framework, changes in key definitions (such as AE, international transaction) impacting applicability of transfer pricing, evolving dynamics in the Advance Pricing Agreement program and revised reporting requirements. These developments are prompting multinational companies to reassess how inter-company transactions in India are structured, priced, and documented. The changes are expected to influence both the determination of arm’s length pricing and the compliance approach, necessitating a review of existing transfer pricing policies.

The session will inter alia focus on the following:
 

• Legal framework under the New Act and Rules
• Safe Harbour regime and its impact on different industries, including the IT/ ITeS industry.
• Safe Harbour v. Advance Pricing Agreements – Which is better for tax certainty?
• Transfer pricing forms and reporting requirements.
• Practical issues to be faced by the taxpayers.
• Strategic considerations for aligning transfer pricing policies with evolving regulatory approach.
   

Speakers
 

• S. Vasudevan, Executive Partner, LKS
• Harshit Khurana, Associate Partner, LKS
• Devashish Jain, Principal Associate, LKS