The tax division has notified the ‘protected harbour’ charges for FY21 for calculation of switch pricing by overseas corporations in India. Typically, protected harbour is outlined as circumstances during which the tax authority shall settle for the switch worth declared by the taxpayer to be at arm’s size.
The Central Board of Direct Taxes, by way of a notification, has prolonged the applicability of Protected Harbour Guidelines (SHR) to 2020-21.
As per the notification, the charges below SHR relevant from 2016-17 to 2018-19, and later prolonged to 2019-20, will proceed to use for 2020-21 as nicely.
Switch pricing implies the costs at which varied abroad divisions of an organization transact with one another. Following worldwide finest follow, India launched the idea of SHR in Finance Act 2009.
Submit that, the primary spherical of SHR provisions had been launched in August 2013 for a interval of three years, adopted by a revision in 2017 within the SHR which was relevant until 2019-20.