ECONOMICS

Detailed explanation-1: -What is a transfer pricing documentation? Transfer pricing documentation (TP Documentation) is a report that includes and analysis on how taxpayers apply the arm’s length principle to their international related party transactions.

Detailed explanation-2: -In India, transfer pricing is regulated by the Income Tax Act 1961 and the rules prescribed thereunder. The Central Board of Direct Taxes (CBDT) is responsible for enforcing India’s transfer pricing regulations.

Detailed explanation-3: -The Transfer Pricing (TP) Regulations were introduced in India in the year 2001, in order to prevent erosion of Indian tax base. The Indian TP Regulations are contained in Chapter X of the Income-tax Act, 1961 (“the Act”) under the title “Special Provisions relating to avoidance of tax”.