ICAI Issues Exposure Draft Guidance Note on Report Under Section 92E of Income-tax Act 1961:

The Institute of Chartered Accountants of India (ICAI) recently issued an Exposure Draft Guidance Note on the Report under Section 92E of the Income-tax Act, 1961. The guidance note intends to provide a better understanding on the requirements of transfer pricing reports and the responsibilities of taxpayers and accountants.

The proposed guidance note is divided into 10 chapters, covering key areas of transfer pricing. These include an introduction to the provisions, the responsibilities of an enterprise and the accountant, associated enterprises, international transactions and specified domestic transactions.

It also explains the concept of Arm’s Length Price (ALP) and the various methods used for computing the arm’s length price. Other major areas discussed are documentation and verification, penalties and scope of examination under Section 92E.

The guidance note also contains a comparative study of the Income-tax Act, 1961 and Income-tax Act, 2025 and various annexures containing additional information and guidance.

Importantly, the exposure draft has been drafted in line with the provisions of Income-tax Act, 1961 which are applicable till Assessment Year 2026-27. Such proceedings include assessments, appeals and other related proceedings for those years, even when such proceedings are conducted at a later date.