CBDT notifies tolerance limit under transfer pricing for Assessment Year 2021-22

Notification No. 124/2021, dated 29-10-2021

The Central Board of Direct Taxes (CBDT) has notified that the tolerance limit of 1 per cent for wholesale trading and 3 per cent in all other cases for ALP determination during the Assessment Year 2021-22. “Wholesale trading” means an international transaction or specified domestic transaction of trading in goods, which fulfils the following conditions:
(i) Purchase cost of finished goods is eighty percent or more of the total cost pertaining to such trading activities; and
(ii) Average monthly closing inventory of such goods is ten percent or less of sales pertaining to such trading activities.

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