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CS Professional · Advanced Direct Tax Laws and Practice · Transfer Pricing and General Anti Avoidance Rules (GAAR)

Under the Income-tax Act, 2025 (applicable from the June 2027 session), an advance pricing agreement entered into under section 168 can be valid for a period not exceeding how many consecutive tax years, as specified in the agreement?

An advance pricing agreement under section 168 of the Income-tax Act, 2025 is valid for the period specified in it, which cannot exceed five consecutive tax years. This is the statutory ceiling on the agreement's validity.

  1. AThree consecutive tax years
  2. BFive consecutive tax yearsCorrect
  3. CSeven consecutive tax years
  4. DTen consecutive tax years

Explanation

Section 168(4) provides that the agreement is valid for such period, not exceeding five consecutive tax years, as is specified in the agreement. The other periods are not provided in the section.

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