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CBDT notifies ‘safe harbour’ rates for transfer pricing

CBDT notifies ‘safe harbour’ rates for transfer pricing

The tax department has notified the ‘safe harbour’ rates for FY21 for calculation of transfer pricing by foreign companies in India. Generally, safe harbour is defined as circumstances in which the tax authority shall accept the transfer price declared by the taxpayer to be at arm’s length.

The Central Board of Direct Taxes, via a notification, has extended the applicability of Safe Harbour Rules (SHR) to 2020-21.

As per the notification, the rates under SHR applicable from 2016-17 to 2018-19, and later extended to 2019-20, will continue to apply for 2020-21 as well.

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