Such taxpayers can now furnish their tax returns on or before 15 December 2024 (which was previously required to be furnished on or before 30 November 2024)
The Central Board of Direct Taxes (CBDT) has extended the due date for filing the Return of Income for the Assessment Year 2024-25 from 30th November 2024 to 15th December 2024 for assesses mentioned in clause (aa) of Explanation 2 to section 139(1) of the Income-tax Act, 1961, according to a recent CBDT circular.
Such taxpayers can now furnish their tax returns on or before 15 December 2024 (which was previously required to be furnished on or before 30 November 2024)
According to the CBDT circular, “The CBDT, in the exercise of its powers under section 119 of the Income-tax Act, 1961 ('the Act'), extends the due date of furnishing of Return of Income under sub-section (I) of section 139 of the Act for the Assessment Year 2024-25 in the case of assesses referred to in clause (aa) of Explanation 2 to sub-section (1) of section 139 of the Act, which is 30th November 2024 to 15th December 2024,” the circular reads.
The due date for filing Income Tax Returns (ITR) for the Assessment Year 2024-25 has been extended to 15 December 2024, for certain taxpayers to whom transfer pricing provisions are applicable.
“This extension applies to taxpayers required to furnish a Transfer Pricing report under Section 92E of the Income-tax Act, 1961, which pertains to international transactions or specified domestic transactions. These taxpayers typically include companies and entities involved in cross-border or related-party transactions that need to comply with transfer pricing regulations. Such taxpayers can now furnish their tax returns on or before 15 December 2024 (which was previously required to be furnished on or before 30 November 2024),” says Suresh Surana, a Mumbai-based chartered accountant.
What Transfer Pricing Provisions Mean
Transfer pricing provisions under the Income Tax Act, 1961, are designed to ensure that transactions between related parties are conducted at arm's length. This means that the terms and conditions of transactions between related entities should be comparable to those between unrelated entities. These provisions are primarily applicable to enterprises engaged in international transactions or specified domestic transactions.
The rules apply to related parties, such as subsidiaries, parent companies, and sister concerns, engaged in cross-border transactions or domestic transactions. International transactions typically include activities like the sale of goods, provision of services, loans, royalties, and other financial arrangements between associated enterprises (AE) in different countries. The provisions also cover specified domestic transactions (SDT) between related entities within India, such as transactions between group companies or subsidiaries.
These provisions apply to entities with a significant volume of transactions, generally those with a turnover exceeding Rs 10 crore in the previous financial year. The goal is to prevent profit shifting to low-tax jurisdictions and to ensure that income and expenses in inter-company transactions are appropriately reported for tax purposes.
By enforcing these rules, the Income Tax Department aims to curb tax avoidance strategies where companies might manipulate pricing to reduce taxable income, ensuring fair taxation based on real economic activity rather than artificially inflated inter-company prices.