India: CBDT notifies rule for secondary adjustments in transfer pricing

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The CBDT has notified a new “Income Tax Rule 10CB” which stipulates a deadline for the reimbursement of excess money (90 days) and the applicable interest rate (separate interest rates for transactions in INR / foreign currency) taken into account in the calculation of interest Secondary settlement price adjustments in the IT area 92CE with effect from 15 June 2017.

It should be noted that the Income Tax was introduced by the Finance Act of 2017 with effect from 1 April 2018 in order to provide for a secondary adjustment by transferring the surplus money that is in the hands of the associate to income Actual allocation of funds in accordance with the primary settlement price adjustment. This provision applies to primary adjustments that have exceeded the Rupees One Crore made with respect to the 2017-18 evaluation year.

Consequently, the CBDT has notified the “Income Tax Rules 10CB” for the operationalization of the provisions of the Secondary Settlement Calculation Rate (TP) on 15 June 2017, which stipulates the time limit for the repatriation of surplus money and the interest rate to be used for the calculation, the excess money within the prescribed period to repatriate. For international transactions denominated in Indian currency and in foreign currency, separate interest rates were granted. The interest rates apply annually.

The 90-day deadline for the reimbursement of surplus money only begins when the primary adjustments that exceed the core rupees made for the 2017-18 or later valuation year are final. If the charging price is contested by the taxpayer, the time limit for the return is not commenced until after the complaint has been terminated by the appellate authority.

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