Budget 2026: CMAs Brought Under Safe Harbour Certification Framework in Income Tax Rules Draft
CMAs brought under the safe harbour certification framework in the draft Income-tax Rules, 2026, expanding the category of professionals authorised to certify transfer pricing compliance.
The draft Income-tax Rules, 2026 issued under Union Budget 2026 bring Cost andManagement Accountants (CMAs) within the safe harbour certification framework for transfer pricing. This change expands the category of professionals authorised to issue mandatory certifications under the safe harbour rules and directly affects taxpayers opting for safe harbour, especially in relation to low value-adding intra-group services.
Scope of Safe Harbour Under Draft Rules
The draft rules prescribe a safe harbour regime for specified international transactions between an Indian assessee and its associated enterprise, where one party is a non-resident. Where the prescribed conditions are met, the transfer price declared by the assessee must be accepted by the income-tax authorities. The covered transactions include:
- provision of information technology services
- intra-group loans
- corporate guarantees
- contract research and development services
- manufacture and export of core and non-core auto components
- receipt of low value-adding intra-group services
- provision of data centre services
Certification Requirement and Role of CMAs
For low value-adding intra-group services, the draft rules impose specific conditions. These include:
- aggregate value of services, including mark-up not exceeding 5 per cent, must not exceed ₹10 crores in the tax year
- certification by an accountant is mandatory for:
- method of cost pooling
- exclusion of shareholder costs and duplicate costs from the cost pool
- reasonableness of allocation keys used for cost allocation
Since the draft rules require certification by an “accountant”, CMAs now fall within the authorised category for issuing safe harbour certifications. This change expands the pool of certifying professionals and increases CMA participation in transfer pricing compliance.
Procedure for Exercising Safe Harbour Option
The draft rules lay down a detailed procedure for exercising the safe harbour option:
- for transactions other than IT services:
- Form No. 49 must be filed with the Assessing Officer on or before the due date for filing the return of income
- the return of income must be filed on or before the date of furnishing Form No. 49
- the Assessing Officer must verify eligibility and may refer the matter to the Transfer Pricing Officer
- failure by authorities to act within prescribed timelines results in deemed validity of the safe harbour option
- for IT services:
- Form No. 49 must be filed electronically with the Director General of Income-tax (Systems)
- once accepted, the option remains valid for five consecutive tax years
Applicability Period
The draft rules state that:
- safe harbour provisions apply for a block period of three tax years starting from tax year 2026–27
- the provisions continue for subsequent block periods unless modified
The inclusion of CMAs in the safe harbour certification framework under Budget 2026 is a structural compliance reform. It widens the certification base, strengthens implementation of safe harbour rules, and formalises the role of CMAs in transfer pricing under the draft Income-tax Rules, 2026.
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