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CMA Final · Direct Tax Laws and International Taxation · Transfer Pricing

A TPO makes a reference-based order for the tax year in which the assessment limitation period expires on 31 March 2028 under the Income-tax Act, 2025 as amended w.e.f. 1-4-2026. By which date must the TPO pass his order determining the arm's length price?

The TPO order must be made on or before 31 January 2028. The amended rule requires the order before one month prior to the month in which the assessment limitation expires, and where that expiry is 31 March, the deadline is 31 January of that year.

  1. A31 January 2028Correct
  2. B31 December 2027
  3. C31 October 2027
  4. D30 March 2028

Explanation

Section 166(7) now requires the order to be made at least one month before the month in which limitation expires. Where limitation expires on 31 March, the TPO order is due by 31 January of that year. The earlier rule of sixty days before expiry is no longer the test, and 31 December would not follow from the provision.

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