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Transfer pricing in India

Transfer pricing in India regulates transactions between associated enterprises, particularly cross-border transactions, by applying the Arm’s Length Principle to ensure fair pricing and prevent tax avoidance. Sections 92–92F of the Income Tax Act, 1961 establish rules for associated enterprises, international transactions, pricing methods, documentation, and compliance. The framework includes methods such as CUP, RPM, Cost Plus, Profit Split and TNMM, along with Safe Harbour Rules that provide certainty for eligible transactions. Recent judicial decisions show that Indian courts increasingly focus on the actual functions, assets, risks, business model and evidence rather than merely labels, making transfer pricing an important governance and risk-management exercise for multinational enterprises.

Thariya Elizabeth Jacob · 26 August 2026