**Executive Summary**
This notification from the Ministry of Finance, Department of Revenue, addresses Income Tax regulations. It specifies the permissible variation between the arm's length price determined under Section 92C of the Income-tax Act, 1961, and the actual transaction price for international or specified domestic transactions for the assessment year 2025-2026. The notification is effective from November 6, 2025.
**Key Points / Main Content**
* **Tolerance Range for Transaction Prices (Assessment Year 2025-2026):**
* **Wholesale Trading:** If the difference between the arm's length price and the actual transaction price does not exceed one percent of the actual price, the actual price will be considered the arm's length price.
* **All Other Cases:** If the difference between the arm's length price and the actual transaction price does not exceed three percent of the actual price, the actual price will be considered the arm's length price.
* **Definition of "Wholesale Trading":**
* It refers to international or specified domestic transactions of trading in goods that meet the following conditions:
* Purchase cost of finished goods is 80% or more of the total cost of such trading activities.
* Average monthly closing inventory of such goods is 10% or less of sales related to such trading activities.
**Impact Analysis**
**Taxpayers involved in International or Specified Domestic Transactions**
* **Impact:** Specifies the acceptable range of variance between the arm's length price and the actual transaction price for assessment year 2025-2026, affecting the determination of taxable income.
* **Action Required:** Taxpayers need to ensure that their transaction prices fall within the defined tolerance limits (1% for wholesale trading and 3% for all other cases) to be considered at arm's length. They also need to check if they are involved in "wholesale trading".
Key Entities Referenced
Income-tax Act, 1961: The primary law governing income tax in India, referenced in the notification for its provisions on arm's length pricing.
Income-tax Rules, 1962: Rules that provide detailed procedures for the implementation of the Income-tax Act, 1961, referenced in the notification.
Section 92C: Section of the Income-tax Act, 1961 dealing with arm's length price determination, which is the focus of the notification.
Ministry of Finance: The ministry responsible for the notification, specifically the Department of Revenue, which deals with income tax matters.
New Delhi: Location where the notification was issued.
रजिस्ट्री स.ं डी.एल.- 33004/99 REGD. No. D. L.-33004/99
सी.जी.-डी.एल.-अ.-06112025-267425
CG-DxLx-xEG-I0D6H1x1x2x0 25-267425
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असाधारण
EXTRAORDINARY
भाग II—खण् ड 3—उप-खण्ड (ii)
PART II—Section 3—Sub-section (ii)
प्राजधकार स ेप्रकाजित
PUBLISHED BY AUTHORITY
स.ं 4898] नई दिल्ली, बहृ स्ट्प जतिार, निम्ब र 6, 2025/कार्तका 15, 1947
No. 4898 NEW DELHI, THURSDAY, NOVEMBER 6, 2025/KARTIKA 15, 1947
जित्त मंत्रालय
(रािस्ट्ि जिभाग)
अजधसचू ना
नई दिल्ली, 6 निम् बर, 2025
आय-कर
का.आ. 5053(अ).— केंद्रीय सरकार, आय-कर जनय़म, 1962 के जनयम 10गक के उपजनयम (7) के परंतुक
के साथ पठित आय-कर अजधजनयम,1961 (1961 का 43) (जिसे इसम ें इसके पश्चात उक्त अजधजनयम कहा गया
ह)ै की धारा 92ग की उपधारा (2) के तीसरे परंतकु द्वारा प्रित्त िजक्तयों का प्रयोग करते हुए, यह अजधसूजचत करती
ह ै दक िहा ं उक्त अजधजनयम की धारा 92ग के अधीन अिधाठरत असजिकट कीमत और िह कीमत, जिस पर
अंतरााष्ट्रीय संव्यिहार या जिजनर्िाष्ट िेिी संव्यिहार िास्ट्तजिक रूप से दकया गया ह,ै के बीच अंतर (i) थोक व्यापार
की बाबत बाि िाली कीमत के एक प्रजतित से अजधक नहीं ह ै और (ii) सभी अन्य मामलों में बाि िाली कीमत के
तीन प्रजतित से अजधक नहीं ह,ै िहा ं िह कीमत, जिस पर अंतरााष्ट्रीय संव्यिहार या जिजनर्िाष्ट िेिी संव्यिहार
िास्ट्तजिक रूप से दकया गया ह,ै जनधाारण िर्ा 2025-2026 के जलए असजिकट कीमत समझी िायेगी।
स्ट्पष्टीकरण- इस अजधसूचना के प्रयोिनों के जलए, “थोक व्यापार” से ऐस े माल के व्यापार का ऐसा अंतरााष्ट्रीय
संव्यिहार या जिजनर्िाष्ट िेिी संव्यिहार अजभप्रेत ह,ै िो जनम्नजलजखत ितों को पूरा करता ह,ै अथाात् :--
क. तैयार माल की क्रय लागत, ऐसे व्यापाठरक दक्रयाकलापों स े संबंजधत कुल लागत का अस्ट्सी प्रजतित या
उससे अजधक ह ै ; और
7408 GI/2025 (1)2 THE GAZETTE OF INDIA : EXTRAORDINARY [PART II—SEC. 3(ii)]
ख. ऐसे माल की औसत माजसक अंजतम सूची ऐसे व्यापाठरक दक्रयाकलापों से संबंजधत जिक्रयों का िस प्रजतित
या उससे कम ह।ै
(अजधसूचना स.ं 157/2025/ एफ.स.ं 500/1/2014-एपीए-II)
कार्ताक चेबोजल,आयकर उप आयुक्त (ओएसडी) (एपीए-I)एफटी एंड टीआर-I,सीबीडीटी
स्ट्पष्टीकारक ज्ञापन
यह अजधसूचना जनधारा ण िर्ा 2025-2026 के जलए थोक व्यापार के जलए एक प्रजतित और अन्य सभी
मामलों म ें तीन प्रजतित की सह्य रेंि का उपबंध करती ह।ै यह प्रमाजणत दकया िाता ह ै दक इस अजधसूचना को
भूतलक्षी प्रभाि दिए िाने स े दकसी पर भी कोई प्रजतकूल प्रभाि नहीं पडेगा।
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.
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