Transfer Pricing – Section 92

Transfer Pricing – Section 92


What is Transfer Pricing?

Transfer pricing is the related to determining the value of goods & services exchanged or transferred between two related parties or related parties situated in other countries. The purpose of transfer pricing is to ensure that the price determined in the following transaction should be at arm’s length price.


For what type of transactions pricing is computed under transfer pricing?


  • Any income arising from an international transaction
  • Allowance for any expense or interest arising from an international transaction
  • Allocation for any cost/ expense in relation to the services provided to the associated party
  • Any income, expense or interest or allocation of any cost in relation to specified domestic party


In case of, all of the above transaction the transfer pricing is used to determine the price of transaction at arm’s length price.


In what cases the provisions of Transfer pricing will not apply?


The provisions of transfer pricing will not apply where in the process of:

  • Computation of income
  • Determining the allowance for any expense or interest
  • Determination of any cost or expense allocated


Will result in reducing the income chargeable to tax (profit) or increasing the loss of the assessee to whom the transfer pricing is applied.


Disclaimer: The above-mentioned cases are illustrative and not exhaustive. This article is only for discussing general issues and hereby we do not express any opinion or give any consultation in whatsoever manner understood. The cases may differ from assessee to assessee. We recommend you to take expert advice depending upon your particular case.

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