CBDT Amends TP Safe Harbour Rules, Increasing Threshold and Adding Lithium-Ion Batteries for EVs as ‘Core Auto Components’

Notification No. 21/2025, dated 25-03-2025

Section 92CB of the Income-tax Act, 1961, empowers the Central Board of Direct Taxes (CBDT) to prescribe Safe Harbour Rules (SHR) for determining the arm’s length price under Section 92C or Section 92CA. Rules 10TA to 10TG of the Income-tax Rules set out the provisions governing Safe Harbour Rules.

The CBDT has amended Rules 10TA, 10TD, and 10TE to broaden the scope of the Safe Harbour framework. The key amendments are as follows:

1. Increase in threshold limit: Rule 10TD(2A), which specifies threshold limits and conditions for treating certain international and specified domestic transactions as being at arm’s length, has been revised to increase the safe harbour threshold from Rs. 200 crores to Rs. 300 crores.
2. Expansion of eligible transactions: Clause (b) of Rule 10TA, which defines “eligible international transaction” for Safe Harbour Rules, has been amended by inserting sub-clause (iv) to include “lithium-ion batteries for use in electric or hybrid electric vehicles” as core auto components.
3. Applicability of amendments: To ensure tax certainty for taxpayers opting for safe harbour, Rule 10TD(3B) has been amended to extend the applicability of these changes to Assessment Years 2025-26 and 2026-27.

The amendments are effective from 25-03-2025.

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