India’s Transfer Pricing Framework: Evolution, Challenges, and Future Directions

Mamta Bhawanishanker Khandelwal
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Mamta Bhawanishanker Khandelwal: G.H. Raisani University, Sai Kheda

International Journal of Research and Innovation in Applied Science, 2025, vol. 10, issue 8, 1729-1734

Abstract: India’s transfer pricing regime, governed by Chapter X of the Income Tax Act, 1961, is a robust framework aligned with OECD guidelines, designed to curb profit shifting and ensure tax base integrity. This white paper provides a comprehensive analysis of the regime’s statutory provisions, methodologies, documentation requirements, and dispute resolution mechanisms. It highlights recent developments, including a record 125 Advance Pricing Agreements (APAs) in FY 2023–24, amendments to Safe Harbour Rules, and the innovative Block Transfer Pricing Assessment Scheme introduced in the Finance Act, 2025. Through a SWOT analysis, comparative perspective, case studies, and visual aids (tables, charts, and flowcharts), the paper evaluates strengths like global alignment and challenges such as high compliance costs. Recommendations include digital transformation, simplified thresholds for SMEs, and enhanced global collaboration. This study contributes to tax scholarship by offering insights into India’s role in global tax governance.

Date: 2025
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