DT - Transfer Pricing

Question 1

Interest Rate on secondary adjustments ( If International Transaction denominated in Indian Rupees)

Answer 1

1 year SBI rate as on 1st April of PY (PY 21-22) + 3.25%

Question 2

Interest Rate on secondary adjustments ( If International Transaction denominated in Foreign Currency)

Answer 2

6 months LIBOR rate as on 30th September of PY (PY 21-22) + 3%

Question 3

Additional Income Tax of excess money not repatriated

Answer 3

@20.9664% (18% tax+12% Surcharge +4% Cess) on such excess money

Question 3

Additional Income Tax of excess money not repatriated

Answer 3

@20.9664% (18% tax+12% Surcharge +4% Cess) on such excess money

Question 4

Requirement to Maintain TP Report

Answer 4

International Transaction above Rs 1 Cr

Question 5

Form to be furnished by CA to report International Transaction and its Due Date

Answer 5

FORM 3CEB
Due date 31st Oct of AY

Question 6

Failure to report international transaction at ALP

Answer 6

Section 270A
Amount = 200% of tax on under reported Income
If assessee maintains all doc , declare transaction and discloses all facts then no penalty

Question 7

Failure to furnish audit report

Answer 7

Rs 1,00,000

Question 8

Fails to
1. Keep and maintain docs u/s 92D
2. Report International Transaction
3. Furnish documents required by AO/CIT(A) within time
4.Maintain & Furnish Incorrect information or documents

Answer 8

2% of Value of International Transaction

Question 9

Penalty for Non Furnishing CBC Report
Period of Delay being
1.1 month
2.Beyond 1 month
3.Continuing Default after Notice
4.Inaccurate Info

Answer 9

1. 5000 per day
   2.15000 per day (beyond 1 month)
2. 50000 per day (from notice date)
3. 5,00,000

Question 10

Specified Domestic Transaction

Answer 10

1. Shifting profit to Tax holiday Enterprise
2. Shifting profit to loss making Enterprise
   Applicable only if Aggregate SDT exceed Rs 20 Cr

Question 11

Notified Jurisdictional Area

Answer 11

Any t/s with person in NJA Int t/s
Any amt received from NJA deemed to be income if source not explained
Rate of TDS for payment to person in NJA
Rate prescribed by IT Act or 30% whichever is higher

Question 12

Limitation of Interest Deduction (Section 94B)

Answer 12

Applicable to
Indian Co or PE of a Foreign Co in India
Excess Interest disallowed
Int to AE - 30% of EBITDA
Int on AE
whichever is lower will be disallowed
Excess Int can be set off & c/f for 8 AY
Not appl if Int upto Rs 1 Cr or borrower is banking or insurance co