Overview
The Central Board of Direct Taxes (CBDT) has expanded the Safe Harbour Rules (SHR) under the Income-tax Rules, 1962, providing greater tax certainty to businesses engaged in international transactions.
Key Highlights
Wider Coverage: More categories of transactions are now covered under SHR.
Lower Compliance Burden: Reduces transfer pricing disputes by providing predefined margins.
Increased Thresholds: Higher monetary limits for eligible transactions.
Simplified Tax Assessment: Reduces litigation risks by offering predictability in taxation.
Impact on Businesses
Reduced Tax Uncertainty: Helps multinational companies and businesses involved in cross-border transactions.
Lower Litigation Risk: Minimizes disputes with tax authorities.
Operational Ease: Ensures compliance efficiency for taxpayers opting for Safe Harbour provisions.
Conclusion
The expansion of Safe Harbour Rules aligns with India’s efforts to simplify transfer pricing regulations and enhance ease of doing business. Businesses engaged in international transactions should review these changes and assess eligibility for SHR benefits.
