Extension of Applicability of Safe Harbour Rules to AY 2023-24
The Central Board of Direct Taxes (CBDT) vide Notification1
dated 9 August 2023 has extended the applicability of the Safe Harbour Rules under Rule 10TD of the Income-tax Rules, 1962 (the Rules) to Assessment Year (AY) 2023-24.
These rules may be called the Income-tax (15th Amendment) Rules, 2023 and shall be deemed to have come into force from 1 April 2023.
The CBDT has notified that Sub-rule (1) and (2A) under Rule 10TD of the Rules will now apply to AY 2023-24 as well. These sub-rules were initially applicable from AY 2020-21 to AY 2022-23, which were then extended to AY 2023-24.
Safe Harbour provisions currently provide for circumstances in which certain transactions like IT/ITeS/KPO, contract R&D services, manufacture of automobile components, financial transactions such as loans and guarantees, and intra-group transactions viz receipt of low value-added intra-group services are covered. If a company opts for Safe Harbour provisions, subject to the fulfillment of certain conditions, the Indian tax authorities would automatically accept the transfer prices declared.
We have covered the previous extension of the applicability of Safe Harbour Rules in an earlier tax alert, which can be found here
- Notification No. 58/2023/ F. No. 370142/26/2023-TPL