ALP Computation – Notified Percentage(%) Variation (AY 2015-16)

Allowed % Variation for AY 2015-16 between the ALP determined under S.92C and the price of International Transaction or Specified Domestic Transaction

The CBDT has notified the allowed % variation between the ALP determined under S.92C and the price of International Transaction or Specified Domestic Transaction for AY 2015-16, as under:

CBDT Notification No. 86/2015 dt. 29 Oct. 2015

In exercise of the powers conferred by the third proviso to sub-section (2) of section 92C of the Income-tax Act, 1961 (43 of 1961) read with proviso to sub-rule (7) of rule 10CA of the Income-tax Rules, 1962, the Central Government hereby notifies that where the variation between the arm’s length price determined under section 92C and the price at which the international transaction or specified domestic transaction has actually been undertaken does not exceed one percent. of the latter in respect of wholesale trading and three percent. of the latter in all other cases, the price at which the international transaction or specified domestic transaction has actually been undertaken shall be deemed to be the arm’s length price for Assessment Year 2015-2016.

Explanations

 For the purposes of this notification, “wholesale trading” means an international transaction or specified domestic transaction of trading in goods, which fulfills the following conditions, namely:-

(i) purchase cost of finished goods is eighty percent. or more of the total cost pertaining to such trading activities; and

(ii) average monthly closing inventory of such goods is ten percent. or less of sales pertaining to such trading activities.

CBDT Notification No. 86/2015 dt. 29 Oct. 2015

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