India: Expanded scope of transfer pricing safe harbors

Including increase in safe harbor turnover threshold for “eligible international transactions”

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May 7, 2025

The Central Board of Direct Taxes (CBDT) on March 25, 2025, issued a notification expanding the scope of the transfer pricing safe harbor rules by:

  • Increasing the safe harbor turnover threshold from INR 2 billion to INR 3 billion for “eligible international transactions” (e.g., information technology (IT) services, IT-enabled services, knowledge process outsourcing, contract research and development (R&D) services, manufacturing auto components, loans, guarantees, and specific intra-group transactions) for which the tax authority will accept the declared transfer price if it meets specified criteria
  • Extending the application of the safe harbor rules to assessment years 2025-2026 and 2026-2027 (tax years 2024-2025 and 2025-2026)
  • Expanding the definition of core auto components to include lithium-ion batteries used in electric or hybrid vehicles


For further information, contact a KPMG tax professional in India:

Gaurav Goyal | gauravgoyal5@kpmg.com

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