What is Transfer Pricing Audit
A specialized statutory requirement under Section 92E of the Income Tax Act, 1961, for entities engaged in international or specified domestic transactions with associated enterprises. Involves FAR Analysis, benchmarking, Form 3CEB filing, and OECD/BEPS compliance.
Who Needs It?
- International Transactions with AEs outside India (no minimum threshold)
- Specified Domestic Transactions (SDT) > ₹20 Crores in a financial year
- Deemed International Transactions with unrelated third parties with prior AE agreements
Penalties for Non-Compliance
Failure to File Form 3CEB
₹1,00,000 (Section 271BA)
Failure to Maintain Documentation
2% of transaction value (Section 271AA)
Failure to Report a Transaction
2% of that transaction value
Failure to Produce Documents
2% of transaction value (Section 271G)
Under-reporting of Income
50%–200% of tax payable on adjustment (Section 270A)