Changes to India’s 5% rule
September 01, 2009
Changes to India’s transfer pricing rules crucial for taxpayers.
One of the key aspects that differentiate the Indian transfer pricing regulations from most other countries is that India allows for a ±5% variation as the arm’s-length range, instead of the typical inter‑quartile range used in most jurisdictions. The manner in which this ±5% variation rule is to be applied has been a subject of multiple legislative amendments, interpretations by the Revenue, contrary interpretations by taxpayers and judicial rulings.
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