Tax Management India. Com
Law and Practice  :  Digital eBook
Research is most exciting & rewarding


  TMI - Tax Management India. Com
Follow us:
  Facebook   Twitter   Linkedin   Telegram
Statutory Provisions

Home Acts & Rules Bill Bills FINANCE (No. 2) BILL, 2014 Chapters List Chapter III DIRECT TAXES This

Clause 32 - Amendment of section 92CC - FINANCE (No. 2) BILL, 2014

FINANCE (No. 2) BILL, 2014
Chapter III
DIRECT TAXES
  • Contents

Amendment of section 92CC

32. In section 92CC of the Income-tax Act, after sub-section (9), the following sub-section shall be inserted with effect from the 1st day of October, 2014, namely:–

          “(9A) The agreement referred to in sub-section (1), may, subject to such conditions, procedure and manner as may be prescribed, provide for determining the arm’s length price or specify the manner in which arm’s length price shall be determined in relation to the international transaction entered into by the person during any period not exceeding four previous years preceding the first of the previous years referred to in sub-section (4), and the arm’s length price of such international transaction shall be determined in accordance with the said agreement.”.

 



 

Notes on Clauses:

Clause 32 of the Bill seeks to amend section 92CC of the Income-tax Act relating to advance pricing agreement.

          The existing provisions of section 92CC empowers the Board to enter into an advance pricing agreement, with the approval of the Central Government, with any person for determining arm’s length price or specifying the manner in which arm’s length price is to be determined in relation to an international transaction which is to be entered into by such person. The agreement entered into is valid for a period, not exceeding five previous years, as may be mentioned in the agreement. Once the advance pricing agreement is entered into, the arm’s length price of the international transaction, which is the subject matter of the same, is determined in accordance with such agreement. Sub-section (9) of the said section empowers the Board to prescribe the scheme specifying therein the manner, form, procedure and any other matter generally in respect of advance pricing agreement.

          It is proposed to insert a new sub-section (9A) in section 92CC to provide that an advance pricing agreement may, subject to such conditions, procedure and manner as may be prescribed, provide for determining the arm’s length price or specify the manner in which arm’s length price shall be determined in relation to an international transaction entered into by the person during any period not exceeding four previous years preceding the first of the previous year for which the agreement applies in case of future transactions. It is further provided that where such agreement provides for determination in respect of past transactions, the arm’s length price of such transactions shall be determined in accordance with the agreement.

          This amendment will take effect from 1st October, 2014.

 
 
 
 

Quick Updates:Latest Updates