I-T notifies ‘safe harbour’ rates for firms
The tax department has notified the ‘safe harbour’ rates for 2020-21 for calculation of transfer pricing by foreign firms in India. Generally, safe harbour is defined as circumstances in which the tax authority shall accept the transfer price declared by the taxpayer to be at arm’s length.
The Central Board of Direct Taxes, through a notification, extended the applicability of Safe Harbour Rules (SHR) to 2020-21. As per the notification, the rates under SHR applicable from 2016-17 to 2018-19, and later extended to 2019-20, will continue to apply for 2020-21 as well.