CBDT Keeps tolerance level for transfer pricing unchanged for AY 2015-16

CBDT vide notification no.86/2015/F.No.500/1/2014-APA-II, notified  the tolerance limits for international transactions / specified domestic transaction entered into by the assessee’s with associated enterprises as under:

  1. Wholesale Trading : 1%
  2. Others cases : 3%

For the purpose of this notification: Wholesale trading means an international transaction or specified domestic transaction of trading in goods which fulfills the following conditions:

  1. purchase cost of finished goods is 80% or more of the total cost pertaining to such trading activities;
  2. average monthly closing inventory of such goods is 10% or less of sales pertaining to such trading activities

The notification can be downloaded by clicking –> govt-notifies-old-tolerance-limit-of-1-and-3-under-new-tp-rule

Author: Jinesh Bhagdev

A Jinesh R. Bhagdev CA Jinesh R. Bhagdev, an associate member of The Institute of Chartered Accountants of India, specializes in the field of Transfer Pricing and International Taxation, Domestic Taxation, Auditing and Assurance, Financial Planning & Advisory and other allied field of Chartered Accountancy Profession. CA Jinesh R. Bhagdev is one of the contributors to the book ‘Practical Guide to Indian Transfer Pricing’ published by Chambers of Tax Consultants in September 2010. CA Jinesh R. Bhagdev is one of the eminent speakers at various seminars conducted by the Institute of Chartered Accountants of India, Institute of Company Secretaries of India and other professional bodies like Bombay Chartered Accountants Society. CA Jinesh R. Bhagdev regularly contributes to various articles on transfer pricing on various platforms like www.caclubindia.com, www.taxguru.in, professional blogs on Transfer Pricing and International Taxation, etc.

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