What Is Transfer Pricing?

Transfer pricing is setting the price at which transactions within and between companies take place. The cost set for a transaction is called the transfer price.

Documents Required For Applying:

1. Detailed documentation of the entity and its functions & assets
2. Economic and market analysis, forecasts, budget reports
3. Records related to uncontrollable transactions and pricing methods
4. Once you have the three-tier documents ready, you need to submit them to your area’s tax officer.


1. For failing to furnish chartered accountant report a fine of Rs 1,00,000 is imposed.

2. Not Maintaining Documents can cost you 2% of the value of each transaction.

3. Not Producing Documents attracts a penalty equal to 2% of the specified transaction value.

Is it mandatory?

Yes, as a failure in doing so could cost you heavy fines.


Large taxpayers whose annual transactions are equal or greater than Rs 200 million.
If your annual turnover is Rs 200 million or more than no later than 10 calendar days.
Two weeks to three months, approximately.

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