Ministry of Finance Department of Revenue Central Board of Direct Taxes

Notification u/s 92C(2) of the Income Tax Act, 1961

Issue Date: 06 November 2025 Published: 06 November 2025

Gazette ID: CG-DL-E-06112025-267425 Download PDF

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Core Purpose

The Central Government notifies specific tolerance ranges for variations between arm's length price and actual transaction price for the assessment year 2025-2026 under the Income-tax Act, 1961 and Income-tax Rules, 1962.

Detailed Summary

The Ministry of Finance (Department of Revenue), through Notification S.O. 5053(E) dated 6th November, 2025, in exercise of powers conferred by the third proviso to sub-section (2) of section 92C of the Income-tax Act, 1961 (43 of 1961) read with the proviso to sub-rule (7) of rule 10CA of the Income-tax Rules, 1962, has notified that for the assessment year 2025-2026, the price at which an international or specified domestic transaction was undertaken shall be deemed to be the arm's length price if the variation does not exceed one percent for wholesale trading or three percent in all other cases. "Wholesale trading" is defined as an international or specified domestic transaction of trading in goods where the purchase cost of finished goods is eighty percent or more of the total cost, and the average monthly closing inventory is ten percent or less of sales pertaining to such activities. The notification, signed by Karthik Cheboli, Deputy Commissioner of Income Tax (OSD)(APA-I)FT&TR -I, CBDT, includes an Explanatory Memorandum certifying that no one will be adversely affected by its retrospective effect.

Full Text

REGD. No. D. L.-33004/99 The Gazette of India CG-DL-E-06112025-267425 EXTRAORDINARY PART II-Section 3-Sub-section (ii) PUBLISHED BY AUTHORITY No. 4898 NEW DELHI, THURSDAY, NOVEMBER 6, 2025/KARTIKA 15, 1947 MINISTRY OF FINANCE (Department of Revenue) NOTIFICATION New Delhi, the 6th November, 2025 Income Tax S.O. 5053(E).— In exercise of the powers conferred by the third proviso to sub-section (2) of section 92C of the Income-tax Act, 1961 (43 of 1961)(hereafter referred to as the said Act) read with the proviso to sub-rule (7) of rule 10CA of the Income-tax Rules, 1962, the Central Government hereby notifies that where the variation between the arm's length price determined under section 92C of the said Act and the price at which the international transaction or specified domestic transaction has actually been undertaken does not exceed, (i) one per cent. of the latter in respect of wholesale trading; and (ii) three per cent. of the latter in all other cases the price at which the international transaction or specified domestic transaction has actually been undertaken shall be deemed to be the arm's length price for the assessment year 2025-2026. Explanation.- For the purposes of this notification, “wholesale trading" means an international transaction or specified domestic transaction of trading in goods, which fulfils the following conditions, namely:- a. purchase cost of finished goods is eighty per cent. or more of the total cost pertaining to such trading activities; and b. average monthly closing inventory of such goods is ten per cent. or less of sales pertaining to such trading activities. [No.157/2025/F. No. 500/1/2014-APA-II] KARTHIK CHEBOLI, Deputy Commissioner of Income Tax (OSD)(APA-I)FT&TR -I, CBDT Explanatory Memorandum The notification provides for tolerance range of one per cent. for wholesale trading and three per cent. in all other cases for the assessment year 2025-2026. It is certified that none will be adversely affected by the retrospective effect being given to the notification. Uploaded by Dte. of Printing at Government of India Press, Ring Road, Mayapuri, New Delhi-110064 and Published by the Controller of Publications, Delhi-110054. AMIT KUMAR JAISWAL Digitally signed by AMIT KUMAR JAISWAL Date: 2025.11.06 22:52:52 +0530

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