Short answer: if your entity had any international transaction with an associated enterprise, an accountant's report is due — there is no threshold below which it is excused. That report was Form 3CEB under Section 92E. Under the Income-tax Act 2025 it is Form 48 under Section 172, and the whole transfer pricing chapter has been renumbered with it.
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Form 3CEB, now Form 48: the transfer pricing filings a captive makes
CA K Sanjay Bhargav, Chartered Accountant, Bengaluru
Membership No. 250054 · DISA (ICAI)
Published
For a captive, this is not a question of size
Most compliance obligations arrive with a threshold attached. This one does not. A single international transaction with an associated enterprise brings the report into play, whatever its value.
For a GCC or captive that is effectively automatic. The service fee your Indian entity charges its overseas parent is an international transaction with an associated enterprise. There is no version of the arrangement in which the question does not arise — the only questions are what the price should be and what has to be filed about it.
The forms have new numbers
| What it is | Was | Now |
|---|---|---|
| Accountant's report | Form 3CEB | Form 48 |
| Master File report | Form 3CEAA | Form 56 |
| Master File designated-entity intimation | Form 3CEAB | Form 57 |
| CbCR notification by an Indian constituent entity | Form 3CEAC | Form 58 |
| Country-by-country report | Form 3CEAD | Form 59 |
| CbCR designated-entity intimation | Form 3CEAE | Form 60 |
The substance of each carries over. What changed is the numbering — and almost everything written about these filings still uses the old set, which is a problem when someone is searching for the form they have been asked for.
Which numbering applies depends on the year, not on the date you are working. The 2025 Act governs tax year 2026-27 onwards; a report for an earlier year stays on the old numbering. That is the same rule the site sets out in which Act applies to the year in front of you.
And so has the chapter behind them
| Was | Now | |
|---|---|---|
| Arm's length price, computation | s.92 | s.161 |
| Associated enterprise | s.92A | s.162 |
| International transaction | s.92B | s.163 |
| Specified domestic transaction | s.92BA | s.164 |
| Determination of arm's length price | s.92C | s.165 |
| Reference to the Transfer Pricing Officer | s.92CA | s.166 |
| Safe harbour rules | s.92CB | s.167 |
| Advance pricing agreement | s.92CC / 92CD | s.168 / 169 |
| Secondary adjustment | s.92CE | s.170 |
| Documentation | s.92D | s.171 |
| Accountant's report | s.92E | s.172 |
| Country-by-country reporting | s.286 | s.511 |
Two wording changes are worth noticing rather than skimming. Section 92C was headed computation of arm's length price; Section 165 is headed determination of it. And the charging provision now expressly covers both international transactions and specified domestic transactions in its own heading, where the old Section 92 did not.
The dates, and the order they fall in
The dates are not all the same, and the report is due before the return, not with it.
| Filing | Due |
|---|---|
| Accountant's report — Form 48 | 31 October |
| Form 57, where a designated entity will file the Master File | 31 October |
| Master File — Form 56 | 30 November |
| Return of income, where s.172 applies | 30 November |
| CbC report — Form 59 | 12 months from the end of the reporting accounting year |
| Form 58, notifying who will report | 2 months before Form 59 is due |
None of those is stated as a date in the Act. Each is the end of a short chain, and it is worth seeing the chain because that is what makes the dates stable:
- s.263(1)(c) sets the return due date. Where s.172 applies — that is, wherever the accountant's report is required — it is 30 November. Everyone else lands on 31 October, 31 August or 31 July.
- s.172 requires the report by the "specified date", and s.173 defines that as one month before the s.263(1) return due date. One month before 30 November is 31 October.
- Rule 123(2) ties the Master File to "the due date for furnishing the return of income as specified under s.263(1)(c)" — so Form 56 follows the return at 30 November, a month after the report.
- Rule 123(4) puts Form 57 thirty days before Form 56.
- s.511(2) gives the CbC report twelve months from the end of the reporting accounting year, and Rule 124(2) puts the Form 58 notification two months before that.
For a group whose reporting accounting year ends on 31 March, the second half of that works out as Form 59 due the following 31 March, with Form 58 due 31 January before it.
The practical trap is the first one. A captive that treats "the transfer pricing deadline" as a single 30 November date has already missed the report by a month.
None of these dates has moved with the new Act. The return due dates in s.263(1)(c) read identically to Explanation 2 to s.139(1) of the 1961 Act, right down to the 31 August band; the "one month before" rule for the report is the same in s.173 as it was in s.92F; and the twelve months for CbCR is the same in s.511(2) as in s.286(2).
One caution that matters more than any of the above. These are the dates the Act and the Rules set. The CBDT extends them by circular with some regularity, sometimes more than once in a season and sometimes only for particular filings. An extension of the return due date will move the report date with it, because the report is defined relative to the return rather than fixed. Always check whether a circular has moved your year before working to the statutory date.
The report is filed; the documentation is kept
This is the distinction that decides how much trouble an entity is actually in.
The report — Form 48, under Section 172 — is furnished each year. It is prepared by an accountant and it addresses the international and specified domestic transactions and whether they are at arm's length.
The documentation — under what was Section 92D, now Section 171 — is maintained by you and produced when it is called for. It is not filed with the report.
They carry separate penalties, and that is the point. An entity that files the report but cannot produce the documentation when asked has a problem, not an absence of one.
Note also that this report is not the tax audit report. They sit under different provisions, do different work, and neither substitutes for the other. A captive commonly needs both, on their own timetables — the wider audit calendar is in tax audit season.
The Master File: two tests, and one part everybody files
The rules moved as well as the Act. Rule 10DA of the 1962 Rules is now Rule 123 of the Income-tax Rules 2026, and Rule 10DB is now Rule 124.
The Master File has two threshold limbs, and both must be met:
| Threshold | |
|---|---|
| Limb one — consolidated group revenue | More than ₹500 crore for the accounting year, per the consolidated financial statement |
| Limb two — either of these | International transactions during the year exceeding ₹50 crore … |
| … or transactions in the purchase, sale, transfer, lease or use of intangible property exceeding ₹10 crore |
Limb one and limb two. A group with ₹4,000 crore of revenue and ₹20 crore of Indian intercompany transactions does not meet limb two, and does not maintain the Master File. A group at ₹300 crore of revenue does not meet limb one however large its Indian transactions are.
Note the intangible-property limb carefully. It is set at a fifth of the general figure, and a captive doing product or R&D work for its parent can cross ₹10 crore on intangibles alone while sitting well under ₹50 crore overall.
But there is a part everybody files anyway. Rule 123(3) — like Rule 10DA(3) before it — requires Part A of Form 56 to be furnished even where the thresholds in sub-rule (1) are not satisfied. So the practical position for a constituent entity of an international group is:
- Below the thresholds: Part A of Form 56 only
- Above them: the full Master File maintained, and Form 56 furnished
Getting this wrong in the cheap direction — assuming that being under the threshold means nothing is due — is the common error, and it is a filing failure rather than a documentation one.
Where several Indian constituent entities would each have to file, one may be designated to do it, provided that designation is intimated in Form 57 thirty days before the Form 56 due date. Form 56 itself is due on the date the return of income is due, and goes to the Joint Director designated for the purpose under Rule 124(1).
One thing genuinely changed. The retention period was eight years from the end of the relevant assessment year under Rule 10DA(5). Under Rule 123(5) it is nine years from the end of the relevant tax year — a longer period, measured from a differently-defined starting point.
Country-by-country reporting: one number
CbCR has a single threshold, and it is much higher:
| Threshold | |
|---|---|
| Total consolidated group revenue | ₹6,400 crore |
That figure is unchanged — it was prescribed under Rule 10DB(6) for the purposes of the old s.286(7), and appears at Rule 124(7) for the purposes of s.511(8). Most captives are nowhere near it. Those belonging to large multinational groups are comfortably over it, and for them the question is never whether CbCR applies but who files what, and where.
| Situation | Form |
|---|---|
| Indian constituent entity notifying who the reporting entity is | Form 58, due two months before the report is due |
| Indian parent or alternate reporting entity filing the report | Form 59 |
| Intimation of the designated constituent entity | Form 60 |
Two timing points are worth holding. Where the obligation falls on the Indian constituent entity under s.511(4), the period is twelve months from the end of the reporting accounting year. And where the parent sits in a jurisdiction that has suffered a systemic failure — an exchange relationship that has broken down — and that has been intimated to the entity, the period becomes six months from the end of the month of intimation.
A drafting change sits underneath the last of those forms. The designated-entity intimation used to be required by the proviso to s.286(4); it is now a sub-section in its own right at s.511(5).
There is also a trap in the exchange rate, because the two rules do not use the same one. Rule 123 converts group revenue at the telegraphic transfer buying rate on the last day of the accounting year. Rule 124 uses the rate on the last day of the accounting year preceding it. For a group hovering near either threshold, that difference decides the answer.
What the margin has to be supported by
A captive is usually remunerated on a cost-plus basis: the parent pays costs plus a margin. The whole of the transfer pricing exercise comes down to whether that margin is one an independent party would have accepted.
That is established by benchmarking — identifying companies doing broadly comparable work at arm's length, and comparing their margins to yours. The comparable set is where the argument is actually won or lost, and it is where files most often turn out to be weak:
- Rolled forward rather than refreshed. A comparable set assembled three years ago, reused because it produced a convenient answer, is the first thing an officer will take apart.
- Comparables that are not comparable. A captive doing routine engineering support benchmarked against product companies carrying their own market risk is not comparing like with like, and the mismatch usually runs in the department's favour.
- A functional description that does not match reality. The agreement says routine support; the team has been running independent product decisions for two years. The benchmarking then supports a characterisation the facts do not.
The third is the one worth watching, because it accumulates quietly. What the Indian entity actually does tends to drift upward over time, and nobody updates the paperwork.
When the case is referred to a Transfer Pricing Officer
A transfer pricing matter is not always dealt with by the assessing officer. It can be referred to a Transfer Pricing Officer — a specialist — under what was Section 92CA, now Section 166.
Practically, that changes the character of the exercise. The questions get more specific, they focus on the comparable set and the functional analysis rather than on the arithmetic, and the documentation under Section 171 is what you are answering with. This is the point at which a file that was assembled to be filed, rather than assembled to be defended, starts to show.
Where a notice arrives carrying section numbers you do not recognise, the renumbering is doing the same work there as it does here — see income tax notices under the new Act.
The penalties are layered on purpose
| Failure | Was | Now | Amount |
|---|---|---|---|
| Documents not kept, a transaction not reported, or incorrect information | s.271AA(1) | s.442(1) | 2% of the value of each transaction |
| Master File information not furnished | s.271AA(2) | s.442(2) | ₹5,00,000 |
| Documents not produced when required | s.271G | s.457 | 2% of the value, for each failure |
| Country-by-country report not furnished | s.271GB(1) | s.459(1) | ₹5,000 a day to one month, ₹15,000 a day beyond |
| CbCR information not produced | s.271GB(2) | s.459(2) | ₹5,000 a day |
| Either, continuing after a penalty order is served | s.271GB(3) | s.459(3) | ₹50,000 a day |
| Inaccurate information in the CbC report | s.271GB(4) | s.459(4) | ₹5,00,000 |
Every one of those amounts is unchanged from the 1961 Act. Note what the percentages are charged on, though: 2% of the value of the transaction, not of the tax or the adjustment. On a captive's annual service fee that is not a small number, and s.457 applies it for each failure.
Two of these are worth separating in your head. Not keeping the documents is s.442; not producing them when the officer asks is s.457. They are different failures with different provisions, and complying with one does not answer the other.
The one penalty that has gone
There used to be a dedicated penalty for not furnishing the accountant's report — ₹1,00,000 under s.271BA. The 2025 Act carried it over as s.447, and then s.447 was omitted by Act No. 4 of 2026 with effect from 1 April 2026 — that is, from the day the new Act commenced. The heading survives in the section list; the provision does not.
Do not read that as the report becoming optional. The obligation under s.172 is untouched, and s.442(1)(b) still penalises a failure to report a transaction at 2% of that transaction's value — which on any material intercompany flow is a great deal more than ₹1,00,000 ever was. There is also a textual hint that the change was deliberate rather than an oversight: the old s.271AA(1) opened "without prejudice to … section 271BA", expressly stacking the two, and the new s.442(1) simply drops that clause.
Exactly how far s.442(1)(b) reaches where a report is not furnished at all is a question of construction, and this page does not attempt to settle it.
The adjustment that can follow the adjustment
This is the part captives are most often unprepared for, and it sits in the table above without explaining itself.
If the price is adjusted upward, the Indian entity is treated as having earned more than it was actually paid. The extra money is, in real terms, still sitting with the parent. Secondary adjustment — what was Section 92CE, now Section 170 — closes that gap. Where a primary adjustment of ₹1 crore or more is not followed by the money being brought into India within ninety days, the excess is treated as an advance to the associated enterprise and carries imputed interest. There is an election to pay 18% on it instead.
The shape to take away is that a transfer pricing adjustment is not self-contained. It has a cash consequence, that consequence has a ninety-day clock, and the clock starts on a date most people have to look up — three of the six start dates are not the return due date.
The trigger, the six start dates, the interest formula (and why the old rule's reference to LIBOR no longer works), and whether the 18% election is worth taking are all set out in secondary adjustment under Section 92CE, now Section 170.
Where safe harbour fits
Electing a safe harbour changes how the price is determined and how far it can be disputed. It does not remove the report, and it does not remove the documentation. The power sits at what was Section 92CB, now Section 167, and the election runs on its own timetable — the rates and eligibility are in the 2026 safe harbour rules.
Nor does it touch the separate question of whether the parent has a permanent establishment in India, which is decided on facts rather than on pricing.
What a captive should have running
- Intercompany agreements that describe what the Indian entity actually does
- A transaction schedule maintained through the year, not reconstructed
- Benchmarking supporting the margin, refreshed rather than rolled forward
- The documentation under Section 171, in existence before it is asked for
- The report under Section 172, on the year's correct form
- A view on safe harbour taken deliberately, before the season
Items one to four are the ones that cannot be done in the filing month. By the time the report is being prepared, the facts it reports on are already fixed.
This is a working reference on the framework, not advice on a particular entity. The thresholds, penalty amounts and due dates set out above are taken from the text of the Income-tax Act 2025 and the Income-tax Rules 2026, and compared against the Income-tax Act 1961 and the Income-tax Rules 1962, as published by the department. The dates given are the statutory ones. The CBDT extends them by circular with some regularity, and an extension of the return due date moves the report date with it — check the circulars for your year rather than working to the dates here. Which numbering applies depends on the year the report covers. Confirm the position for your own year before filing.
Frequently asked questions
Who has to file Form 3CEB?
Any person who has entered into an international transaction, or a specified domestic transaction, during the year. There is no monetary threshold below which the report is excused — a single intercompany transaction is enough to bring it on. For a captive with a foreign parent this is effectively automatic, because the service fee from the parent is itself an international transaction with an associated enterprise.
Has Form 3CEB changed its number?
Yes. Under the Income-tax Act 2025 and the Rules made under it, the accountant's report becomes Form 48, furnished under Section 172 rather than Section 92E. The Master File report moves from Form 3CEAA to Form 56, the designated-entity intimation from 3CEAB to Form 57, and the country-by-country report from 3CEAD to Form 59. The substance of each is carried over; it is the numbering that has changed, and most guidance online still uses the old set.
What are the Master File thresholds?
Two limbs, and both must be met. First, the consolidated group revenue of the international group must exceed ₹500 crore for the accounting year. Second, either the aggregate value of international transactions during the year must exceed ₹50 crore, or transactions in the purchase, sale, transfer, lease or use of intangible property must exceed ₹10 crore. These figures are unchanged by the new regime — they read identically in Rule 10DA(1) of the 1962 Rules and Rule 123(1) of the Income-tax Rules 2026. Watch the intangible-property limb: a captive doing product or R&D work can cross ₹10 crore on intangibles while sitting well below ₹50 crore overall.
If we are below the Master File thresholds, is anything due?
Yes, and this is the point most often missed. Rule 123(3) — like Rule 10DA(3) before it — requires Part A of Form 56 to be furnished by a constituent entity of an international group even where the sub-rule (1) conditions are not satisfied. Being under the threshold means the full Master File need not be maintained and the rest of Form 56 is not otherwise due; it does not mean nothing is filed. Missing it is a filing failure rather than a documentation one, and the two carry different penalties.
What is the country-by-country reporting threshold?
Total consolidated group revenue of ₹6,400 crore. It is a single test, much higher than the Master File thresholds, and it too is unchanged — prescribed under Rule 10DB(6) for the old Section 286(7), and now at Rule 124(7) for Section 511(8). Note that the two rules convert foreign-currency revenue at different dates: Rule 123 uses the telegraphic transfer buying rate on the last day of the accounting year, while Rule 124 uses the rate on the last day of the preceding accounting year. For a group near either threshold that difference can decide the answer.
When is Form 3CEB, now Form 48, due?
31 October, which is a month before the return. Section 172 requires the report by the 'specified date', and Section 173 defines that as one month before the due date for furnishing the return under Section 263(1). Where Section 172 applies the return is due on 30 November under Section 263(1)(c), so the report falls due on 31 October. That relationship is unchanged from the 1961 Act, where Section 92F defined the specified date the same way against Section 139(1). Note that the CBDT extends these dates by circular fairly regularly, and because the report date is defined relative to the return date, an extension of one moves the other.
Is the Master File due on the same date as the report?
No, it is a month later. Rule 123(2) ties Form 56 to the due date for furnishing the return of income under Section 263(1)(c), which for a case where Section 172 applies is 30 November. The accountant's report is due on 31 October. Where a designated entity is to file the Master File on behalf of several Indian constituent entities, Form 57 must be filed thirty days before Form 56, which puts it back at 31 October too. Treating the whole transfer pricing calendar as one 30 November deadline is the common way to be a month late on the report.
When is the country-by-country report due?
Twelve months from the end of the reporting accounting year, under Section 511(2) — unchanged from Section 286(2) of the 1961 Act. For a group whose reporting accounting year ends on 31 March, that means the following 31 March. The Form 58 notification identifying the reporting entity is due two months before that under Rule 124(2), so 31 January. Where the obligation falls on an Indian constituent entity under Section 511(4), Rule 124(4) gives the same twelve-month period.
Is Form 3CEB the same as a tax audit report?
No. They are separate reports under separate provisions, prepared for different purposes, and one does not substitute for the other. The tax audit report deals with the books and the computation generally; the accountant's report under what was Section 92E deals specifically with the international and specified domestic transactions and whether the prices are at arm's length. An entity can need both, and commonly does.
What is the difference between the report and the documentation?
The report is filed; the documentation is kept. The accountant's report is furnished to the department each year. The transfer pricing documentation required under what was Section 92D, now Section 171, is maintained by you and produced when called for. They carry separate penalties, which is the practical point — an entity that files the report but cannot produce the documentation when asked has one problem, not none.
What happens after a transfer pricing adjustment — the secondary adjustment?
Where a primary adjustment of ₹1 crore or more is made, Section 170 — the old Section 92CE — requires the excess money to be repatriated to India within ninety days, failing which it is deemed an advance to the associated enterprise and carries imputed interest. There is an option to pay additional income-tax at 18% on the amount instead. The ninety days runs from one of six different dates depending on how the adjustment arose, which is where the window is most often missed. The trigger, the dates, the interest formula and the election are covered in full in the separate post on secondary adjustment under Section 92CE, now Section 170.
Does the safe harbour route remove the filing?
No. Electing a safe harbour affects how the arm's length price is determined and how far the pricing can be disputed; it does not remove the obligation to furnish the accountant's report or to maintain documentation. The power to make safe harbour rules sits at what was Section 92CB, now Section 167, and the election is a separate decision made on its own timetable.
What happens if the report is not filed?
The position changed with the new Act. Under the 1961 Act a dedicated penalty of ₹1,00,000 applied under Section 271BA. The 2025 Act carried it over as Section 447 and then omitted it, by Act No. 4 of 2026 with effect from 1 April 2026 — the day the new Act commenced. That does not make the report optional: the obligation under Section 172 stands, and Section 442(1)(b) penalises a failure to report a transaction at 2% of that transaction's value, which on a captive's intercompany flows is far more than ₹1,00,000 ever was. How far that provision reaches where no report is furnished at all is a question of construction.
What are the transfer pricing penalty amounts?
Failing to keep and maintain the documents, failing to report a transaction, or maintaining incorrect information each attract 2% of the value of each international or specified domestic transaction under Section 442(1). Failing to furnish the Master File information attracts ₹5,00,000 under Section 442(2). Failing to produce documents when required attracts 2% of the transaction value for each failure under Section 457. Country-by-country failures under Section 459 run at ₹5,000 a day for the first month and ₹15,000 a day thereafter, ₹50,000 a day once a penalty order has been served, and ₹5,00,000 for inaccurate information in the report. Every one of those amounts is unchanged from the corresponding provision of the 1961 Act.
Are the penalties charged on the tax or on the transaction?
On the transaction, which is what makes them bite. The 2% under Sections 442(1) and 457 is 2% of the value of the international or specified domestic transaction itself — not of the tax, the adjustment or the margin. For a captive whose entire service fee from its parent is one international transaction, 2% of that fee is a substantial sum, and Section 457 applies it for each failure rather than once.
Running a captive and facing the transfer pricing calendar?
Send the intercompany agreements, the transaction schedule and last year's report. What has to be filed, what documentation has to exist behind it, and whether the safe harbour route is worth taking are settled before the season, not during it.
Related service: GCC & Captive Units