Transfer pricing | Statutory definitions | Updated October 2026

Section 92F of the Income-tax Act, 1961: Definitions for Transfer Pricing and Arm's Length Price

Section 92F defines key expressions used in India's transfer pricing provisions. These definitions determine how related-party international transactions and specified domestic transactions are identified, documented and tested against the arm's length principle.

Important statutory update: The Income-tax Act, 2025 took effect on 1 April 2026. Section 173 is the corresponding definitions provision. Section 92F of the 1961 Act remains relevant to proceedings and tax years governed by that Act. Apply the legislation and rules appropriate to the tax year concerned.

Meaning and scope of Section 92F

Under the Income-tax Act, 1961, Section 92F provides definitions for Sections 92, 92A, 92B, 92C, 92D and 92E, unless the context otherwise requires. Its clauses cover the following expressions:

Clause	Defined term	Explanation
92F(i)	Accountant	Has the meaning assigned in the Explanation below Section 288(2), including applicable qualification and independence conditions.
92F(ii)	Arm's length price (ALP)	The price applied or proposed in a transaction between persons other than associated enterprises, under uncontrolled conditions.
92F(iii)	Enterprise	Broadly covers a person, including a permanent establishment, engaged or proposed to be engaged in specified commercial, financial, service, intellectual property or investment activities.
92F(iiia)	Permanent establishment	Includes a fixed place of business through which the business of an enterprise is wholly or partly carried on.
92F(iv)	Specified date	The date one month before the due date for furnishing the return under Section 139(1) for the relevant assessment year, under the amended 1961 Act.
92F(v)	Transaction	Includes arrangements, understandings and concerted actions, even if informal, unwritten or legally unenforceable.

Arm's length price under Section 92F(ii)

The arm's length principle asks what independent persons would charge or agree in comparable uncontrolled circumstances. The statutory definition identifies the benchmark; the computation methods and comparability rules are principally addressed by Section 92C and the applicable rules.

Pricing a transaction between associated enterprises at a stated amount does not by itself establish that the price is at arm's length. Functions performed, assets employed, risks assumed, contractual terms, market conditions and reliable comparable transactions may affect the analysis.

Meaning of enterprise under Section 92F(iii)

The definition is deliberately extensive. It covers activities involving goods, know-how, patents, copyrights, trademarks, licences, franchises, commercial rights, data, designs and processes; the provision of services; work performed under contracts; investments; loans; and dealings in shares, debentures and other securities. Activities may be carried out directly or through units, divisions or subsidiaries at the same or different locations.

Permanent establishment under Section 92F(iiia)

A permanent establishment includes a fixed place of business through which an enterprise carries on business wholly or partly. This is an inclusive definition used for transfer pricing purposes; the treatment of a particular establishment under a tax treaty must also be considered separately.

Accountant under Section 92F(i)

The definition cross-refers to Section 288(2). For transfer pricing reporting, Section 92E requires a report from an eligible accountant in the prescribed form. Eligibility and independence requirements should be verified for the applicable period.

Specified date under Section 92F(iv)

The Finance Act, 2020 amended clause (iv) with effect from 1 April 2020. Under the amended wording, the specified date is one month before the due date for filing the income-tax return under Section 139(1) for the relevant assessment year. The original webpage reflected the superseded wording that equated the specified date with the return-filing due date.

The specified date matters particularly for transfer pricing accountant reports and contemporaneous documentation. Any statutory or officially notified extension must be considered for the relevant year; do not assume the same calendar deadline applies every year.

Transaction under Section 92F(v)

The expression includes an arrangement, understanding or action in concert, whether or not it is formal or written and whether or not it is intended to be enforceable by legal proceedings. Accordingly, a lack of a signed contract does not automatically remove a dealing from transfer pricing examination.

Practical illustrations

Example 1: Sale of goods to a foreign associated enterprise

An Indian company sells components to its foreign group company. The arm's length analysis may compare the price with suitable uncontrolled sales after making reliable adjustments for differences in terms and circumstances. The existence of an associated enterprise relationship is determined under Section 92A, not merely from the definition of ALP.

Example 2: Unwritten service arrangement

An Indian entity performs support services for a foreign associated enterprise based on an informal understanding. Section 92F(v) makes clear that an unwritten arrangement can still constitute a transaction. Whether it is an international transaction depends on Section 92B and the facts.

Example 3: Reporting timeline

If the applicable Section 139(1) return-filing due date is 30 November, the specified date under the amended Section 92F(iv) would ordinarily be 31 October. Check any legally effective extensions and the rules for the year concerned.

Section 92A defines associated enterprises; Section 92B defines international transactions; Section 92BA concerns specified domestic transactions; Section 92D covers documentation; and Section 92E covers the accountant's report. Other related provisions include Section 92CA, Section 92CB, Section 92CC, Section 92CD and Section 92CE.

Income-tax Act, 2025: corresponding Section 173

The official section-mapping navigator identifies Section 173 of the Income-tax Act, 2025 as corresponding to Section 92F of the 1961 Act. While the subject matter remains transfer pricing definitions, statutory cross-references, reporting dates and procedural requirements should be read from the law applicable to the relevant tax year rather than automatically carrying forward older section numbers.

Frequently asked questions

What is an arm's length price under Section 92F?

It is a price applied or proposed in a transaction between persons other than associated enterprises under uncontrolled conditions.

What is the specified date under Section 92F?

For the 1961 Act, it is one month before the due date for furnishing the return under section 139(1) for the relevant assessment year. Check applicable extensions.

Can an unwritten understanding be a transaction?

Yes. The inclusive definition covers arrangements, understandings and concerted action whether written or enforceable or not.

Which provision corresponds to Section 92F in the Income-tax Act, 2025?

Section 173 is the corresponding definitions provision in the 2025 Act; its precise wording and applicability should be checked for the relevant tax year.

Official legislation and references

Editorial note: This is a general explanation, not a substitute for the enacted statutory text, relevant rules, notifications and professional advice. Legislative provisions may differ by tax year.