CBDT notifies Tolerance Range for Transfer Pricing for A.Y 2024-25

The Central Board of Direct Taxes (CBDT) has notified the tolerance range for transfer pricing for the assessment year 2024-25. The notification specifies that the arm’s length price determined by the transfer pricing officer should not exceed 1% of the international transaction value for wholesale trading and 3% for all other transactions. This tolerance range aims to provide clarity and reduce litigation in transfer pricing cases. The CBDT’s notification is part of its ongoing efforts to streamline transfer pricing regulations and ensure compliance with international standards. Taxpayers engaged in international transactions must adhere to these guidelines to avoid penalties and disputes with tax authorities. The notification also emphasizes the importance of maintaining proper documentation and justifying the arm’s length price to support transfer pricing positions.