India Introduces Advance Pricing Agreements in 2012 for Tax Certainty, Under Sections 92CC & 92CD of Income Tax Act.

Advance Pricing Agreements (APAs) were introduced in India through the Finance Act, 2012, under sections 92CC and 92CD of the Income Tax Act, 1961. These agreements aim to provide tax certainty and a unified approach to determining the arm's length price in international transactions between associated enterprises. The APA process is voluntary and complements existing mechanisms like appeals and Double Taxation Avoidance Agreements (DTAA) for resolving transfer pricing disputes. The Central Board of Direct Taxes, with government approval, can enter agreements specifying the arm's length price or its determination method. Rules 10F to 10T of the Income Tax Rules, 1962, outline the APA scheme.

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