Finance Act, 2026 changes transfer pricing deadlines, APA returns and report fees
Key points
- Finance Act, 2026 sets calendar deadlines for Transfer Pricing Officer orders under both the Income-tax Act, 1961 and the Income-tax Act, 2025.
- It lets an associated enterprise file a return reflecting an APA and sets a fee for not furnishing the section 172 accountant's report.
- Changes to the 2025 Act apply from 1 April 2026; the 1961 Act change on TPO deadlines applies retrospectively from 1 June 2007.
The Finance Act, 2026 (No. 4 of 2026), which received the President’s assent on 30 March 2026, changes several transfer pricing procedures under both the Income-tax Act, 1961 and the new Income-tax Act, 2025. It fixes calendar deadlines for Transfer Pricing Officer (TPO) orders, allows an associated enterprise to file a return reflecting an advance pricing agreement (APA), and sets a fee for not furnishing the accountant’s report required by section 172 of the 2025 Act.
What has changed
Deadlines for TPO orders
For the 1961 Act, a new section 92CA(3AA) sets out how the sixty-day period before the assessment time limit is counted. It is deemed to have been inserted from 1 June 2007 and applies notwithstanding any judgment, order or decree of a court. For the 2025 Act, a substituted section 166(7) requires the TPO’s order before one month prior to the month in which the time limit under section 286 or 296 expires.
| Assessment time limit expires on | Last date for TPO order (1961 Act) | Last date for TPO order (2025 Act) |
|---|---|---|
| 31 March (not a leap year) | 30 January | 31 January |
| 31 March (leap year) | 31 January | 31 January |
| 31 December | 1 November | 31 October |
Assessment time limit
A substituted section 286(2) of the 2025 Act extends the time limit for an assessment or reassessment by an additional twelve months where a reference is made to the TPO under section 166(1). The draft assessment order under section 275 is to be made at any time up to that limit.
Returns after an APA
Under the substituted section 169(1), where income is modified as a result of an APA, the person who entered into it shall, and any other person being an associated enterprise may, furnish a return or modified return in accordance with and limited to the agreement. The time allowed is three months from the end of the month in which the agreement was entered into, for the tax years the agreement covers.
Fee for the accountant’s report
The substituted section 428 makes a person who fails to furnish the accountant’s report required by section 172 liable to a fee of ₹50,000 for a delay of up to one month and ₹1,00,000 thereafter.
Return due date
The due date table in section 263(1)(c) of the 2025 Act sets 30 November of the following financial year where section 172 applies, and 31 October for companies and audited assessees where it does not. The table substituted in section 139 of the 1961 Act, with effect from 1 March 2026, likewise sets 30 November where section 92E applies. The Act also makes technical amendments to sections 162, 164 and 165 of the 2025 Act.
Who is affected
Companies and other assessees that must furnish the transfer pricing accountant’s report, such as Indian subsidiaries of foreign groups and startups with overseas parents or subsidiaries; groups with APAs signed or under negotiation, and their associated enterprises; and taxpayers with transfer pricing assessments under the 1961 Act, given the retrospective change.
What this means for businesses
In practice, the last date for a TPO order under either Act can now be read as a fixed calendar date. Because the 1961 Act change is retrospective to 1 June 2007 and overrides court decisions, taxpayers who have argued that a TPO order was passed late should review those cases with their advisers.
The APA change matters where an agreement changes income on both sides of a transaction: the associated enterprise may also file a return in line with the agreement within the same three-month window.
The fee for a late section 172 report starts at ₹50,000 even for a short delay, so finance teams should plan to finish the report well before it is due. The Finance Act does not itself set the report’s form or due date; those come from the rules.
Key dates
- 1 June 2007: date from which section 92CA(3AA) of the 1961 Act is deemed inserted.
- 1 March 2026: substituted due date table in section 139 of the 1961 Act takes effect.
- 30 March 2026: Finance Act, 2026 receives assent.
- 1 April 2026: amendments to the Income-tax Act, 2025 take effect.
- 30 November: return due date where section 172 applies.
This update was written with AI from the official source above and automatically fact-checked against it before publishing. It is general information, not professional advice. Check the source, or talk to a Chartered Accountant, before acting on it.