India’s transfer pricing framework continues to evolve in line with international tax transparency standards. With the Income-tax Act, 2025 coming into effect from 1 April 2026, replacing the Income-tax Act, 1961, Multinational Enterprise (MNE) groups must now comply with transfer pricing documentation requirements under the new legislative framework.
The Income-tax Act, 2025 simplifies the structure and language of India’s direct tax law while preserving the substantive requirements relating to transfer pricing documentation, including the Master File and Country-by-Country Reporting (CbCR) introduced in line with the OECD’s Base Erosion and Profit Shifting (BEPS) Action 13 recommendations.
Although the law has been reorganized and section references have changed, the compliance objective remains the same—to provide tax authorities with a transparent view of an MNE group’s global operations, value creation and allocation of profits across jurisdictions.
From Tax Year 2026-27 onwards, Master File and Country-by-Country Reporting are governed by the Income-tax Act, 2025 and the Income-tax Rules, 2026. One of the most notable procedural changes introduced by the new Act is the replacement of the concepts of Previous Year and Assessment Year with a single Tax Year, simplifying tax administration and compliance.
The substantive documentation requirements for transfer pricing continue to follow the OECD’s three-tier documentation approach:
Accordingly, multinational groups must continue maintaining robust transfer pricing documentation, with compliance obligations now arising under the corresponding provisions of the Income-tax Act, 2025 and the Income-tax Rules, 2026.
A constituent entity resident in India is required to furnish a Master File where the prescribed thresholds relating to consolidated group revenue and international transactions are met. The documentation requirements continue to broadly align with the OECD BEPS Action 13 framework.
Where multiple constituent entities of the same international group are resident in India, one designated entity may file the Master File on behalf of all eligible Indian constituent entities.
The prescribed filing forms notified under the Income-tax Rules, 2026 should be used for compliance. Taxpayers should also refer to the CBDT’s updated guidance and forms applicable under the new legislative framework.
The Country-by-Country Reporting framework continues to apply to eligible multinational groups exceeding the prescribed consolidated revenue threshold.
The report provides jurisdiction-wise information relating to:
Indian parent entities, alternate reporting entities and constituent entities are required to comply with the applicable notification and reporting requirements within the prescribed timelines under the Income-tax Rules, 2026.
The transition to the new law does not significantly alter the scope of Master File or CbCR reporting. However, taxpayers should note the following important changes:
A: The Income-tax Act, 2025 replaces the Income-tax Act, 1961 with effect from April 1, 2026. While the law simplifies structure and language, it preserves the substantive Master File and CbCR requirements introduced in line with the OECD’s BEPS Action 13 recommendations.
A: The replacement of the concepts of Previous Year and Assessment Year with a single Tax Year, simplifying tax administration and compliance terminology.
A: The OECD’s three-tier documentation approach continues to apply:
A: No — one designated entity may file the Master File on behalf of all eligible Indian constituent entities of the same international group.
While the Income-tax Act, 2025 introduces a modernized and simplified legislative framework, the core principles governing Master File and Country-by-Country Reporting remain consistent with India’s long-standing commitment to the OECD BEPS Action 13 standards. Multinational enterprise groups should use this transition as an opportunity to review and update their transfer pricing documentation, governance processes and internal compliance systems to ensure seamless compliance under the new law.
Update your TP documentation before the deadline. UJA Global Advisory — reach out now!
While the Income-tax Act, 2025 introduces a modernized and simplified legislative framework, the core principles governing Master File and Country-by-Country Reporting remain consistent with India’s long-standing commitment to the OECD BEPS Action 13 standards. Multinational enterprise groups should use this transition as an opportunity to review and update their transfer pricing documentation, governance processes and internal compliance systems to ensure seamless compliance under the new law.
Update your TP documentation before the deadline. UJA Global Advisory — reach out now!