Transfer pricing
Income tax
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Year-end
A charge between group companies needs an explanation of what was supplied, who performed the work and how the price was set. TheTaxCo reviews covered transactions, prepares the functional and financial analysis, and completes the annual documentation, accountant’s reporting and filing, with follow-up on the covered transactions.
The annual work has distinct outputs: the transaction inventory, a pricing study with benchmarking where required, and the prescribed accountant’s report. For Tax Year 2026–27, the report is Form 48 under rule 85. It is separate from the income-tax return. Income-tax Rules, 2026, rule 85.
Identify the covered relationships and transactions first
International transactions with associated enterprises and specified domestic transactions require their own statutory tests. Common ownership is a starting point for review, rather than a complete applicability conclusion. Transactions involving an apparently independent counterparty may also need examination where the terms involve an associated enterprise.
The inventory considers sales, purchases, services, licences, royalties, loans, guarantees and other arrangements relevant to the group. Domestic related-party expenditure is not automatically a specified domestic transaction merely because the parties are connected. We document the relationship, transaction and applicable scope before deciding the reporting work. Income-tax Act, 2025, transfer-pricing provisions.
If the agreements are incomplete, the first stage establishes what happened from invoices, correspondence, ledgers and operational evidence. Missing agreements call for evidence collection and a review of the documentation gap.
Explain the commercial activity behind the charge
We map the functions performed, assets used and risks borne by each relevant entity. Finance explains the accounting entries; operational staff explain the actual work. For a service charge, useful evidence can include the work requested, people involved, deliverables and the basis for allocating the cost.
The pricing analysis identifies a suitable method, the tested transaction or party where relevant, and the financial information needed for comparison. Benchmarking includes a documented search approach, reasons for accepting or rejecting comparables, and support for material adjustments. A group policy or a prior-year percentage is evaluated against current activity and results.
Segmented accounts may be needed where several activities share one profit and loss account. We reconcile the segment results and transaction totals to the financial statements so the study and report do not use unrelated figures. Any year-end adjustment is traced through the agreement, invoice, ledger and return consequences before approval.
Records and engagement outputs
Start with the group chart, inter-company transaction list, agreements, current accounts and prior study. The detailed request may cover service evidence, pricing calculations, budgets, segment results and earlier assessment correspondence.
Our team handles applicability review, annual documentation, required benchmarking and the examination, signing and filing of Form 48 through an eligible accountant. We assess master-file and country-by-country reporting obligations alongside the annual work and complete the applicable filings. An advance-pricing arrangement or dispute has its own procedure and timetable; the relevant specialists handle that work when it forms part of the approved mandate.
You receive the covered-transaction schedule, functional analysis, method and benchmarking working, reconciliations and the agreed report. An eligible accountant takes responsibility for the signed report after the necessary examination. Management confirms the transaction facts, supplies the underlying records and completes required approvals or authentication. We file the report, reconcile its disclosures with the income-tax return, retain acknowledgements and respond to subsequent queries within the identified reporting or dispute matter.
Timing and changes during the year
Review a new arrangement before the first invoice where possible. A change in functions, contractual risk, financing or ownership may require more than refreshing the prior-year numbers.
For Tax Year 2026–27, Form 48 is due at least one month before the applicable return due date. The ordinary return date for the section 172 category is 30-11-2027, giving a report date of 31-10-2027, subject to an applicable extension. Rule 85 and section 263 as amended. Preparation requires time for group responses and comparable-data work, so the timetable is agreed before the reporting deadline approaches.
Questions about the annual study
Can we reuse last year’s study if the price is unchanged? The earlier study is a useful starting point. Current transactions, functions, risks, financial results and available comparable information still need review.
Does an overseas group study cover the Indian entity? It may supply evidence, but the Indian transactions, reporting requirements and local financial reconciliation need to be addressed expressly.
Is a management-service agreement enough? The agreement describes the intended arrangement. Evidence of the actual services and the charging basis is needed to support what occurred.
Related services
Email TheTaxCo, message us on WhatsApp or book a call. Share the reporting year, countries involved, main inter-company transactions and whether a prior study is available.