Rule 83 — Time period for repatriation of excess money under section 170(2) and computation of interest income under section 170(4) pursuant to secondary adjustments. Made under s.170, s.167, s.168, s.159, s.263 of the Income-tax Act, 2025.
Rule 83 gives effect to Section 170, Section 167, Section 168, Section 159 and Section 263 of the Income-tax Act, 2025. A rule cannot go beyond the section it serves: where the two seem to differ, the section governs.
The rule fixes when excess money arising from a secondary adjustment must be repatriated to India, and what interest runs if it is not.
Sub-rule (1) sets the time limit for section 170(2)(b): repatriation of the excess money or part of it must be on or before ninety days from the date in column C of the Table, against the circumstance in column B. Entry 1 — primary adjustments made suo motu by the assessee in his return — runs from the due date of furnishing the return under section 263(1). Entry 2 — a primary adjustment determined in the order of the Assessing Officer or the appellate authority and accepted by the assessee — runs from the date of that order. Entry 3 — a primary adjustment determined by an advance pricing agreement entered into under section 168 on or before the due date of furnishing the return for the relevant tax year — runs from the due date of furnishing the return under section 263(1). Entry 4 — where that agreement is entered into after the due date — runs from the end of the month in which the agreement was entered into. Entry 5 — where the assessee has exercised the option under the safe harbour rules under section 167 — runs from the due date of furnishing the return under section 263(1). Entry 6 — where the primary adjustment is determined by a resolution under the mutual agreement procedure under a Double Taxation Avoidance Agreement entered into under section 159(1) or (2) — runs from the date of the order giving effect to that resolution under rule 121(10).
Sub-rule (2) computes the imputed per annum interest income on excess money not repatriated within that time limit. Where the international transaction is denominated in Indian rupee, it is the one-year marginal cost of fund lending rate of the State Bank of India as on the 1st April of the relevant tax year plus 325 basis points. Where the transaction is denominated in foreign currency, it is the reference rate of the relevant foreign currency, as defined in rule 89(3), as on the 30th September of the relevant tax year plus 300 basis points.
Sub-rule (3) fixes the period: the interest is chargeable on the excess money or part not repatriated from the date mentioned in column C of the Table, not from the end of the ninety days. Sub-rule (4) prescribes the exchange rate for converting foreign currency international transactions into rupees as the telegraphic transfer buying rate of that currency on the last day of the tax year in which the transaction was undertaken, with "telegraphic transfer buying rate" taking the meaning assigned in rule 207.
Section 170 makes a transfer pricing adjustment on paper into a real movement of cash: money that ought to have come to India must be brought back, and if it is not, it is treated as a loan on which interest accrues. But section 170(2)(b) leaves the time limit to be prescribed, and section 170(4) leaves the interest rate to be prescribed. The rule supplies both, and — because a primary adjustment can arise in six different ways, each with its own moment of certainty — it fixes a separate starting date for each rather than one date for all.
| What | Figure | The condition on it | Where |
|---|---|---|---|
| Time limit for repatriation of excess money | On or before ninety days | From the date in column C of the Table corresponding to the circumstance in column B | Sub-rule (1) |
| Start date where the primary adjustment is made suo motu in the return, arises under an advance pricing agreement entered into on or before the return due date, or arises from a safe harbour option | Due date of furnishing of return under section 263(1) | Table Sl. Nos. 1, 3 and 5 | Sub-rule (1), Table column C |
| Start date where the assessee accepts an adjustment determined by order | Date of the order of the Assessing Officer or the appellate authority | Table Sl. No. 2 | Sub-rule (1), Table column C |
| Start date where the advance pricing agreement is entered into after the return due date | End of the month in which the advance pricing agreement has been entered into | Table Sl. No. 4 | Sub-rule (1), Table column C |
| Start date where the adjustment is determined under the mutual agreement procedure | Date of order giving effect under rule 121(10) to such resolution | Table Sl. No. 6 | Sub-rule (1), Table column C |
| Imputed interest rate where the international transaction is denominated in Indian rupee | One-year marginal cost of fund lending rate of the State Bank of India as on the 1st April of the relevant tax year plus 325 basis points | Per annum, on excess money or part not repatriated within the time limit in sub-rule (1) | Sub-rule (2)(a) |
| Imputed interest rate where the international transaction is denominated in foreign currency | Reference rate of the relevant foreign currency as on the 30th September of the relevant tax year plus 300 basis points | Per annum; the reference rate is as defined in rule 89(3) | Sub-rule (2)(b) |
| Exchange rate for converting foreign currency international transactions into rupees | Telegraphic transfer buying rate on the last day of the tax year in which the transaction was undertaken | "Telegraphic transfer buying rate" has the meaning assigned in rule 207 | Sub-rule (4) |
The trap is in sub-rule (3). The ninety days is the period allowed for repatriation, but interest does not begin when it expires — once the money is not repatriated in time, interest runs from the column C date itself, so a repatriation on day ninety-one carries interest for the whole ninety-one days. The two rates in sub-rule (2) are chosen by the currency in which the international transaction is denominated, not by where the associated enterprise sits, and each has its own fixing date: 1st April of the relevant tax year for the rupee rate and 30th September for the foreign currency reference rate. The two advance pricing agreement entries turn on a single fact — whether the agreement was entered into on or before the return due date or after it — and only in the later case does the clock start from a month-end rather than the return due date. Where the assessee makes the adjustment suo motu, the clock runs from the due date under section 263(1) and not from the date the return was actually filed.
A company makes a suo motu primary adjustment of Rs 5 crore in its return, and Rs 5 crore of excess money remains with its associated enterprise abroad. Under Table Sl. No. 1 the ninety days runs from the due date of furnishing the return under section 263(1). The money is repatriated one hundred and twenty days after that date, so the limit is missed and, under sub-rule (3), imputed interest runs on Rs 5 crore for all one hundred and twenty days from the return due date. Because the international transaction was denominated in Indian rupee, the rate is the State Bank of India one-year marginal cost of fund lending rate as on 1st April of the relevant tax year plus 325 basis points.
You meet it after any transfer pricing adjustment sticks — in the treasury steps taken to bring the money back within ninety days, in the interest computed in the return or in the Assessing Officer's order where it was not, and in the order giving effect to a mutual agreement procedure resolution.
the time limit for repatriation of excess money or part thereof in the circumstances mentioned in column B of the following Table shall be on or before ninety days from the date mentioned in column C thereof
at the one-year marginal cost of fund lending rate of the State Bank of India as on the 1st April of the relevant tax year plus 325 basis points in the cases where the international transaction is denominated in Indian rupee
The interest referred to in sub-rule (2) shall be chargeable on excess money or part thereof which is not repatriated in cases referred to in column B of the Table in sub-rule (1) from the date mentioned in column C thereof.