Rule 84 — Information and documents to be kept and maintained under section 171(1). Made under s.171 of the Income-tax Act, 2025.
Rule 84 gives effect to Section 171 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 lists the transfer pricing information and documents that must be kept and maintained under section 171(1), the threshold below which the list does not apply, the lighter list for eligible specified domestic transactions, the supporting material, and the retention period.
Sub-rule (1) applies to every person who has entered into an international transaction or a specified domestic transaction and sets out thirteen items, clauses (a) to (m): the ownership structure of the assessee enterprise; a profile of the multinational group with the name, address, legal status and country of tax residence of each enterprise transacted with and the ownership linkages among them; a description of the assessee's business and industry and of the associated enterprises' business; the nature and terms, including prices, of each transaction with details of property transferred or services provided and the quantum and value of each transaction or class of transaction; a functions, assets and risks description for the assessee and the associated enterprises; the economic and market analyses, forecasts, budgets or other financial estimates prepared for the business as a whole and for each division or product; a record of uncontrolled transactions taken into account for comparability; a record of the comparability analysis performed; the methods considered for determining the arm's length price, the method selected as the most appropriate, why it was selected and how it was applied; the actual working carried out, including comparable data, financial information and adjustments; the assumptions, policies and price negotiations that critically affected the determination; the adjustments made to transfer prices and the consequent adjustment to total income; and any other relevant information, data or document.
Sub-rule (2) disapplies sub-rule (1) for an international transaction where the aggregate value of international transactions entered into by the assessee during the tax year, as recorded in the books of account, does not exceed one crore rupees. Sub-rule (3) does not leave such an assessee free of proof: he must still substantiate, on the basis of material available, that income arising from international transactions has been computed in accordance with section 161.
Sub-rule (4) replaces the sub-rule (1) list for an eligible specified domestic transaction referred to in rule 96 in the case of an eligible assessee referred to in rule 95. Clause (a) gives a seven-item list for the eligible assessee referred to in rule 95(a), including a record of proceedings before a regulatory commission and orders of that commission relating to the transaction. Clause (b) gives a seven-item list for the eligible assessee referred to in rule 95(b), built around a cooperative society and its members, including a description of members with their addresses and period of membership and documentation regarding price being routinely declared in a transparent manner and available in the public domain.
Sub-rule (5) requires the information to be supported by authentic documents and gives seven illustrative categories, from official publications and databases of the country of residence of the associated enterprise to letters, e-mails and other correspondence documenting negotiated terms. Sub-rule (6) requires the information and documents to be, as far as possible, contemporaneous and to exist on the specified date referred to in section 173(d). Sub-rule (7) relieves an assessee of fresh documentation for each tax year where a transaction continues beyond one tax year, unless there is a significant change in the nature or terms of the transaction, the underlying assumptions or any other factor affecting the transfer price, in which case fresh documentation must be maintained bringing out its impact on pricing. Sub-rule (8) requires everything specified in sub-rules (1) to (4) to be kept and maintained for nine years from the end of the relevant tax year.
Section 171(1) requires information and documents to be kept and maintained but leaves what they are to be prescribed. The list is built so that the price actually charged can be tested years later against what was known and assumed when it was set — hence the emphasis on the methods considered and rejected, the actual working, the assumptions and negotiations, and the requirement that the material be contemporaneous and exist by the specified date. The one crore threshold and the shorter lists for eligible specified domestic transactions keep the full burden off cases where it would buy little.
| What | Figure | The condition on it | Where |
|---|---|---|---|
| Threshold below which the sub-rule (1) list does not apply to an international transaction | Aggregate value not exceeding one crore rupees | Aggregate value, as recorded in the books of account, of international transactions entered into by the assessee during the tax year | Sub-rule (2) |
| Date by which the information and documents must exist | The specified date referred to in section 173(d) | The material should also, as far as possible, be contemporaneous | Sub-rule (6) |
| Retention period | Nine years from the end of the relevant tax year | For the information and documents specified in sub-rules (1) to (4) | Sub-rule (8) |
The one crore relief in sub-rule (2) is narrower than it looks in three ways. It is tested on the aggregate of the assessee's international transactions for the tax year as recorded in the books, not transaction by transaction; it applies only to international transactions, so a specified domestic transaction stays within sub-rule (1) whatever its size; and sub-rule (3) still requires the assessee to substantiate, on the material available, that the income has been computed in accordance with section 161 — the documentation list falls away, the burden of showing an arm's length result does not. Sub-rule (4) is a substitution, not an addition: where rule 95 and rule 96 are satisfied, the seven-item list replaces the thirteen-item one for that transaction. Sub-rule (7) is often over-read — it excuses repetition, not maintenance, and any significant change in the terms, the assumptions or any other factor affecting the price restores the obligation to document afresh with its impact on pricing brought out. The nine-year retention in sub-rule (8) runs from the end of the relevant tax year and is longer than the ordinary life of the assessment.
A company enters into international transactions with its associated enterprises aggregating Rs 80 lakh in the tax year, as recorded in its books. Sub-rule (2) means it need not build the thirteen-item file, but sub-rule (3) still requires it to be able to show from the material available that its income from those transactions was computed in accordance with section 161. If in the following year the aggregate rises to Rs 3 crore, the full sub-rule (1) documentation must exist on the specified date referred to in section 173(d) and be kept for nine years from the end of that tax year.
You meet it in a transfer pricing assessment or an audit, where the Transfer Pricing Officer calls for the documentation file, and in the preparation of that file before the section 173(d) specified date each year.
Nothing contained in sub-rule (1) shall apply to an international transaction in a case where the aggregate value, as recorded in the books of account, of international transactions entered into by the assessee during the tax year does not exceed one crore rupees.
The information and documents specified in sub-rules (1) to (4) shall be kept and maintained for a period of nine years from the end of the relevant tax year.