India Transfer Pricing Documentation Requirements
India requires contemporaneous transfer pricing documentation once international transactions reach INR 10 million, a Master File filed in Form 3CEAA, and an independent accountant's report in Form 3CEB filed annually. Documentation penalties are geared to the value of the transactions rather than to a fixed sum.
Requirements at a glance
| Requirement | Threshold | Deadline | Deadline type | Language | Penalty |
|---|---|---|---|---|---|
Master File Form 3CEAA
Required | Part A by all constituent entities; Part B above the prescribed group and transaction thresholds | By the return filing date | Preparation deadline The documentation must exist by the date shown and is produced only when the tax authority requests it. Once requested, it must be provided within 30 days. | EN | Yes (INR 500,000 for failure to furnish) |
TP documentation Required | International transactions ≥ INR 10m | By the accountant's report date (31 October) | Preparation deadline The documentation must exist by the date shown and is produced only when the tax authority requests it. Once requested, it must be provided within 30 days. | EN | Yes (2% of the transaction value per failure) |
Form 3CEB Accountant's report
Annual filing | All taxpayers with international transactions or specified domestic transactions | By 31 October | Submission deadline The documentation must be filed with the tax authority by the date shown. | EN | Yes |
CbC report Required | Group revenue ≥ INR 64,000m | 12 months after fiscal year-end | Submission deadline The Country-by-Country report is filed by the group's ultimate parent entity; a local notification identifying the reporting entity is filed separately. | — | Yes |
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Scope of the documentation obligation
Contemporaneous transfer pricing documentation must be maintained where the value of a taxpayer’s international transactions is at least INR 10 million, prepared by the due date for the accountant’s report. The Master File is filed in Form 3CEAA, which has two parts: Part A is filed by every constituent entity in India of an international group, regardless of the value of its transactions and even where none is undertaken, while Part B applies where the group and transaction thresholds are met. Documentation is produced within 30 days of a request during an assessment.
Distinctive features of the Indian regime
Two features distinguish the Indian regime. The first is the accountant’s report in Form 3CEB, an independent certification that must be obtained and filed online by 31 October of the following year, listing the associated enterprises, the nature and value of the international transactions, and the most appropriate method, together with any voluntary adjustment. The second is the structure of the documentation penalties, which are value-based rather than fixed: a failure to keep and maintain documentation, a failure to furnish it during an audit, and the furnishing of incorrect information each attract a penalty of 2 percent of the value of the transactions, while a failure to furnish the Master File in Form 3CEAA attracts a separate fixed penalty of INR 500,000. India also operates administrative safe harbours for defined categories of transaction, elected through Form 3CEFA.
Benchmarking and comparables
Where the tested party is Indian, Indian comparables are preferred, and tax tribunals have indicated that selecting an overseas entity as the tested party may be inappropriate given the difficulty of obtaining the necessary functional and financial data. Foreign comparables may be used where local comparables are unavailable. A multi-year analysis of three years, including the current year, is applied, and a fresh benchmarking search is required every year. The order in a transfer pricing assessment must generally be passed within 36 months of the close of the relevant financial year, with the transfer pricing order passed 60 days before that limit.
Frequently asked questions
Who must file Part A of the Indian Master File?
Part A of Form 3CEAA must be filed by every constituent entity in India of an international group, regardless of whether it meets the Part B thresholds and even where it undertakes no international transaction.
How are Indian documentation penalties calculated?
They are value-based. A failure to keep, furnish, or correctly prepare documentation each attracts 2 percent of the value of the transactions, while a failure to furnish the Master File in Form 3CEAA attracts a separate fixed penalty of INR 500,000.
This guide is an informational research aid prepared by Comp-Press and is not tax or legal advice. Transfer pricing rules change; verify current requirements before relying on them for filing.