Scope of section 92BA of Income-tax Act relating to Specified Domestic Transactions

By | February 24, 2018
(Last Updated On: February 24, 2018)

CBDT CIRCULAR NO.2/2018 [F.NO.370142/15/2017-TPL]DATED 15-2-2018

44. Scope of section 92BA of the Income-tax Act relating to Specified Domestic Transactions (SDTs).

44.1 Before amendment by the Act, the provisions of section 92BA of the Income-tax Act provided inter alia that any expenditure in respect of which payment has been made by the assessee to certain “specified persons” under section 40A(2)(b) of the Income-tax Act were covered within the ambit of SDTs.

44.2 As a matter of compliance and reporting, taxpayers needed to obtain the chartered accountant’s certificate in Form 3CEB providing the details such as list of related parties, nature and value of SDTs, method used to determine the arm’s length price for SDTs, positions taken with regard to certain transactions not considered as SDTs, etc. This had considerably increased the compliance burden of the taxpayers.

44.3 In order to reduce the compliance burden of taxpayers, section 92BA of the Income-tax Act has been amended so as to provide that expenditure in respect of which payment has been made by the assessee to a person referred to in under section 40A(2)(b) are to be excluded from the scope of section 92BA of the Income-tax Act. Consequential amendment has also been made to section 40(A)(2)(a) of the Income-tax Act.

44.4 Applicability: These amendments take effect from 1st April, 2017 and will, accordingly, apply from assessment year 2017-18 and subsequent assessment years.

Leave a Reply

Your email address will not be published.