The Central Board of Direct Taxes (CBDT) recently notified the transfer pricing tolerance limit for computation of Arm’s Length Price (ALP) applicable to assessment years 2017-18 and 2018-19.
As per the current Notification, “where the variation between the arm’s length price determined under section 92C of the Act and the price at which the international transaction or specified domestic transaction has actually been undertaken does not exceed one per cent. of the latter in respect of wholesale trading and three per cent. of the latter in all other cases, the price at which the international transaction or specified domestic transaction has actually been undertaken shall be deemed to be the arm’s length price for assessment year 2017-18 and assessment year 2018-19.”
Read the full text of the Notification below.
