Section 92D Of The Income Tax

A person who is involved in an international transaction or a specified domestic transaction is required by section 92D of the Income Tax Act to maintain the documents required by rule 10D regularly. The documents must be kept for eight years, beginning with the assessment year. This information will provide you with everything you need to know about Section 92D of the Income Tax Act.

Section 92D 

(1) Any person who has entered into an international transaction or a specified domestic transaction must keep and maintain such information and records.

document required

As long as the person is a constituent entity of an international group,

  • (A) The term “constituent entity” has the meaning assigned to it in clause (d) of sub-section (9) of section 286; 
  • (B) the term “international group” has the meaning assigned to it in clause (g) of sub-section (9) of section 286.
  • (2) Without limiting the provisions of sub-section (1), the Board may prescribe the period for which the information and documents must be kept and maintained under that sub-section.
  • (3) In the course of any proceeding under this Act, the Assessing Officer or the Commissioner (Appeals) may require any person who has entered into an international transaction or specified domestic transaction to furnish any information or document in respect thereof, as prescribed under sub-section (1), within thirty days of receipt of a notice issued in this regard:-
  • Provided, however, that the Assessing Officer or the Commissioner (Appeals) may require any person who has entered into an international transaction or specified domestic transaction to furnish any information or document in respect thereof, as prescribed
  • (4) Without prejudice to the provisions of sub-section (3), the person referred to in the proviso to sub-section (1) shall furnish the information and documents referred to in the said proviso to the authority specified in sub-section (1) of section 286, in such manner and on or before the date specified.

  1. International Business Transaction
  2. Domestic Business Transaction 

Information That Must Be Maintained

  • A description of the taxpayer’s enterprise’s ownership structure, including details on shares or other ownership interests held by other enterprises.
  • A profile of the multinational group of which the taxpayer’s enterprise is a member, as well as the name, address, legal status, and country of tax residence of each of the group’s enterprises with which the specified transactions were pursued.
  • A description of the taxpayer’s business, including the area of operation and the business enterprise with which it transacted.
  • The nature and terms of the international transaction pursued with each associated enterprise, as well as the details of property transferred or services provided, as well as the quantum and value of each transaction or class of such transaction.
  • A description of the operational risks assumed, as well as the assets used or to be used by the taxpayer.
  • A record of uncontrolled transactions is considered to compare them to the specified transactions pursued.
  • To assess the comparability of uncontrolled transactions with third parties, a record of the analysis was created.
  • A description of the methods under consideration for determining the arm’s length price for each specified transaction.
  • A record of the steps taken to determine the arm’s length price in each international transaction.
  • Any assumptions, policies, or price negotiations that have had a significant impact on determining the arm’s length price.
  • Details of any adjustments made to transfer prices to bring them into line with arm’s length prices determined under these rules, as well as the resulting adjustments applied to total income for tax purposes.
  • Any additional information, data, or documents that may be relevant in determining the arm’s length price.

Section 92D Of The Income Tax

Documentation Upkeep

  • Official publications, reports, studies, and databases from the government of the associated enterprise’s home country or any other country.
  • Reports on market research studies and technical publications published by reputable institutions.
  • Publications with prices.
  • Accounts and financial statements about the associated enterprises’ business affairs have been published.
  • Agreements and contracts are held with related or unrelated enterprises about transactions that are similar to international transactions.
  • Letters and other correspondence containing any terms reached between the assessee and the associated enterprise.
  • Documents issued in connection with transactions conducted by the pursued accounting practice.A

Non-Maintenance Consequences

  • Keep information and documents about an international transaction or a specified domestic transaction.
  • According to the requirements, report the international transaction or the specified domestic transaction.
  • False information or documents submitted in connection with an international transaction or a specified domestic transaction should be avoided.