Every Indian company that has entered into an international transaction with an associated enterprise must, for each tax year: (1) maintain contemporaneous transfer pricing documentation — the local file — under section 171 of the Income-tax Act, 2025 and Rule 84 of the Income-tax Rules, 2026 (old section 92D, Rule 10D); (2) obtain and file an accountant's report in Form 48 (old Form 3CEB) under section 172 and Rule 85 by 31 October, one month before the 30 November return due date; and, where the group's consolidated revenue exceeds the prescribed thresholds, (3) file the master file (Forms 56/57, old 3CEAA/3CEAB) and (4) the country-by-country report or its notification (Forms 58 to 60, old 3CEAC to 3CEAE). There is no value threshold for the local file obligation or for Form 48.
Key facts
| Provision | Old reference (to 31 Mar 2026) | New reference (from 1 Apr 2026) | Rate / threshold | Timing | Form |
|---|---|---|---|---|---|
| Local file — documentation | s. 92D(1); Rule 10D | s. 171; Rule 84 | No minimum value for applicability; must be contemporaneous | In existence by the return due date; produce within 10 days of notice (extendable) | — |
| Accountant's report | s. 92E; Rule 10E; Form 3CEB | s. 172; Rule 85; Form 48 | Every international transaction, any value; SDTs above ₹20 crore | 31 October (one month before 30 November return date) | Form 48 |
| Return of income — TP cases | s. 139(1) Explanation | Corresponding provision of 2025 Act | — | 30 November following the tax year | ITR |
| Master file — Part A (every constituent entity) | Rule 10DA; Form 3CEAA Part A | Rule 123; Form 56 | No threshold | Return due date | Form 56 |
| Master file — Part B (detailed) | Rule 10DA; Form 3CEAA Part B | Rule 123; Form 56 | Group consolidated revenue > ₹500 crore and international transactions > ₹50 crore (or intangibles-related > ₹10 crore) | Return due date | Form 56 |
| Designation of filing entity (multiple Indian CEs) | Form 3CEAB | Form 57 | — | 30 days before Form 56 due date | Form 57 |
| CbCR notification by Indian CE | s. 286(1); Form 3CEAC | s. 511(1); Form 58 | Group consolidated revenue > ₹6,400 crore | Two months before CbCR due date | Form 58 |
| Country-by-country report | s. 286(2)/(4); Form 3CEAD | s. 511(2)/(4); Form 59 | As above | 12 months from end of the reporting accounting year | Form 59 |
| Penalty — failure to furnish accountant's report | s. 271BA: ₹1,00,000 | Penalty provisions of the 2025 Act (up to ₹1,00,000) | — | — | — |
| Penalty — documentation failures | s. 271AA: 2% of transaction value; 271G: 2% | Corresponding provisions of the 2025 Act | — | — | — |
The local file (section 171, Rule 84)
Rule 84 lists the information and documents to be kept: group ownership structure; profile of the multinational group and of the Indian entity; a description of each international transaction with terms, quantum and counterparties; a functional analysis (functions, assets, risks); the economic analysis — method selection, search strategy, comparables, adjustments, arm's length range; forecasts and budgets relied on; the agreements; and the record of actual pricing. The documentation must be contemporaneous — in existence by the date the return is due — and retained for the period the Rules prescribe. On a notice from the Assessing Officer or TPO, it must be produced within ten days, extendable once by up to thirty days.
In practice the local file is the benchmarking report plus a functional-analysis memorandum plus the intercompany agreements. The common failing is not that it is absent, but that it is prepared only after a notice arrives — which the department treats as no documentation at all for penalty purposes.
Form 48 — the accountant's report (section 172, Rule 85)
A chartered accountant certifies, in Form 48 (old Form 3CEB), that the taxpayer has maintained the prescribed documentation and reports every international transaction and specified domestic transaction with its value, the method used and the arm's length price. The report is filed electronically with a UDIN before the 31 October deadline and is the department's primary selection tool for transfer pricing scrutiny. Three points of discipline:
- Completeness. Every transaction with an AE goes in — including reimbursements, recharges at cost, interest-free loans, guarantees, outstanding receivables and transactions the company considers "not income". Omission is the penalty trigger.
- Consistency. The amounts must tie to the audited financial statements and the related-party disclosures; the methods must tie to the local file.
- Timing. The 31 October date is one month before the 30 November return date for transfer pricing cases. A late Form 48 attracts a penalty of up to ₹1,00,000 and signals to the department that the documentation may not have existed on time.
Master file (Rule 123, Forms 56 and 57)
The master file gives the department a picture of the whole group: organisational structure, business description, intangibles, intercompany financing and the group's consolidated financial and tax position. In India it comes in two parts. Part A of Form 56 — basic group information — is filed by every Indian constituent entity of an international group, without any threshold. Part B, the detailed master file, is required where the group's consolidated revenue in the preceding accounting year exceeded ₹500 crore and either the aggregate value of the Indian entity's international transactions exceeded ₹50 crore or its intangibles-related international transactions exceeded ₹10 crore. Where a group has several Indian entities, one may be designated to file for all through Form 57, filed at least thirty days before the Form 56 due date. Both are due by the return due date.
Country-by-country reporting (section 511, Forms 58 to 60)
CbCR applies to groups with consolidated revenue above ₹6,400 crore (the rupee equivalent of the OECD's EUR 750 million). The report itself (Form 59) is normally filed by the ultimate parent entity in its own jurisdiction and exchanged with India under the multilateral agreement. The Indian constituent entity's obligation is to notify the department in Form 58 — identifying the parent or the alternate reporting entity and its jurisdiction — at least two months before the CbCR due date. If the parent's country does not exchange CbCR with India, or the parent fails to file, the Indian entity may itself have to file Form 59 within twelve months of the end of the reporting accounting year, and Form 60 covers the intimation where more than one Indian entity exists.
The annual calendar for a 31 March year-end
| Date | Filing | Who |
|---|---|---|
| Through the year | Intercompany invoices, true-up, agreements updated; benchmarking refreshed | All |
| 30 September | Statutory audit completed; related-party disclosures finalised | All companies |
| 31 October | Form 48 (accountant's report) | All with international transactions |
| 31 October | Form 57 designation (where applicable) | Groups with multiple Indian entities |
| 30 November | Return of income; Form 56 master file (Part A always; Part B if thresholds met) | All TP cases |
| 31 January (for a 31 March parent year-end) | Form 58 CbCR notification (two months before 31 March) | Indian CEs of groups > ₹6,400 crore |
| 31 March following | Form 59 CbCR (if the Indian entity must file) | Exceptional cases |
Worked example
An Indian company is the only Indian entity of a Swiss group. Group consolidated revenue CHF 280 million (about ₹2,700 crore); the Indian company's international transactions total ₹62 crore, of which ₹3 crore relates to a licensed trademark.
- Local file: required (international transactions exist). Prepared by 30 November with the benchmarking for each transaction class.
- Form 48: required; due 31 October. Reports the ₹62 crore across service fees, trademark royalty, reimbursements and the outstanding receivable balance.
- Master file: Part A required (every constituent entity). Part B required because group revenue exceeds ₹500 crore and international transactions exceed ₹50 crore. Form 56 due 30 November. No Form 57 (single Indian entity).
- CbCR: group revenue is below ₹6,400 crore, so no Form 58 or 59.
Had the international transactions been ₹45 crore with the same ₹3 crore trademark element, Part B would still not apply (₹45 crore is below ₹50 crore and ₹3 crore is below ₹10 crore) — but Part A and Form 48 would.
Common mistakes we see
- Preparing the benchmarking study after receiving a notice. Documentation must exist by the return due date to count as contemporaneous.
- Leaving reimbursements, cost recharges and interest-free balances out of Form 48 because 'there is no profit element'. They are international transactions and must be reported.
- Assuming the master file is the parent's problem. Part A of Form 56 is filed by every Indian constituent entity, and Part B turns on the Indian entity's own transaction values.
- Missing the CbCR notification in Form 58 because the parent files the report abroad. The Indian notification is a separate obligation with its own date.
- Filing Form 48 and the return with figures that do not reconcile to the audited related-party note. The mismatch is an automatic scrutiny flag.
Frequently asked questions
What is the due date for Form 48 (old Form 3CEB)?
31 October following the end of the tax year — one month before the 30 November due date for the return of income of a taxpayer with international transactions.
Is Form 48 required if my international transactions are small?
Yes. There is no minimum value for international transactions. The ₹20 crore threshold applies only to specified domestic transactions.
Do I need a master file if my parent already files one abroad?
Part A of Form 56 is required from every Indian constituent entity regardless. Part B depends on the ₹500 crore group revenue test together with the ₹50 crore or ₹10 crore Indian transaction tests.
What is the CbCR threshold in India?
Consolidated group revenue above ₹6,400 crore in the preceding accounting year. The Indian entity notifies in Form 58 at least two months before the report's due date; the report (Form 59) is usually filed by the parent abroad and exchanged.
What is the penalty for not filing Form 48?
Up to ₹1,00,000, in addition to the risk that the absence of a timely report is treated as evidence that documentation was not maintained — which carries a separate penalty of 2% of the transaction value.
Can the local file be in the parent's format?
The content must meet Rule 84. A group-format local file is acceptable if it contains the Indian functional analysis, Indian comparables and the specific items the Rule lists; most group templates need an India annexure.
How long must transfer pricing records be kept?
For the period prescribed in the Rules, which runs several years beyond the tax year. Keep them for at least as long as the assessment for that year can be reopened.
Sources
Primary sources only. Statutory text is read from the official publication; where a provision has been renumbered, the pre-2026 reference is given alongside so older material can be reconciled.
- Income-tax Act, 2025 and Income-tax Rules, 2026 — Income Tax Department, Tax Laws & Rules
- FAQs and guidance notes on forms under the Income-tax Rules, 2026 — Income Tax Department
- Income-tax e-filing portal — Forms 48, 49, 128, 145 and 146
- e-Gazette of India — Finance Act, 2026; Income-tax Rules, 2026; FEMA notifications
Last reviewed on 1 November 2026 by Suchit Jhunjhunwala, FCA, VMS Jhunjhunwala & Co. Law stated as at that date; the Income-tax Act, 2025 and Income-tax Rules, 2026 apply from 1 April 2026.
