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Section - 92CE - Secondary adjustments in certain cases –

 

It is a new provision sought to be inserted for the purpose of aligning the transfer pricing provisions with the OECD guidelines. Where transfer pricing adjustment has been made which results in increase in the total income or reduction in loss and such adjustment is either made by the assesse suo moto or accepted by him or determined as per advance pricing agreement or safe harbour rule or arises as a result of resolution under mutual agreement procedure, the assessee and the associated enterprise can make secondary adjustment in their books. The increase in profit will be taken as an advance to the associated enterprise and in case the same is not repatriated to India, the notional interest will be computed in the prescribed manner.

 

The provision will not apply if the amount of adjustment does not exceed Rs.1 Crore and the same is made in respect of assessment year 2016-17 or earlier years.

 

The amendment takes effect from 1st April 2018 relevant to assessment year 2018-19.

 


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