If your Indian subsidiary provides services to its overseas parent, pays royalties to a group company or receives an intercompany loan, you may have transfer pricing obligations. You need to support how these transactions are priced and complete the applicable reporting.
The key 2026 update is the change from Form 3CEB to Form 48. However, the correct form depends on the period you are reporting—not simply the date you file.
This guide explains the changes, the records to prepare and the filing calendar for your subsidiary.
What Is Transfer Pricing?
Transfer pricing refers to the prices used for transactions between related businesses.
For example, your Indian subsidiary may develop software for its overseas parent. You need to assess whether the payment reflects what independent businesses would agree for comparable work. This is called the arm’s length principle. It can apply to services, goods, royalties, loans, guarantees and other covered arrangements between group companies. The analysis depends on the transaction and each company’s responsibilities.
What Is Form 3CEB, and Does Your Subsidiary Need It?
Form 3CEB is the accountant’s report prescribed under Section 92E of the Income-tax Act, 1961. A chartered accountant examines the relevant transactions and reports on whether the prescribed information and documents have been maintained.
Foreign ownership alone does not trigger the requirement. Your subsidiary must assess whether it has entered into covered international transactions or specified domestic transactions. For FY 2025–26, covered international transactions do not have a general minimum-value exemption from reporting. Specified domestic transactions have separate conditions and an aggregate threshold exceeding ₹20 crore. This does not mean every payment between related Indian companies is covered.
Important note: The ₹1 crore relaxation under Rule 10D concerns detailed documentation requirements for international transactions. It does not provide a general exemption from Form 3CEB. Even where that relaxation applies, you must still be able to support the pricing used.
Form 3CEB or Form 48: Which Applies?
The Income-tax Act, 2025 took effect on 1 April 2026. Earlier reporting periods continue under the previous framework, while Tax Year 2026–27 onwards uses the new framework.
| Period you are reporting | Accountant's report | Applicable provision |
|---|---|---|
| FY 2025–26, corresponding to AY 2026–27 | Form 3CEB | Section 92E of the Income-tax Act, 1961 |
| Tax Year 2026–27 onwards | Form 48 | Section 172 of the Income-tax Act, 2025 |
The Income Tax Department’s guidance confirms that Form 48 corresponds to Form 3CEB under the new rules.
Important update: Filing after 1 April 2026 does not automatically mean you should use Form 48. For FY 2025–26, continue with the forms applicable under the 1961 Act.
What Changes in Form 48?
Form 48 organises reporting into six parts. These cover taxpayer details, transaction totals, international transactions, specified domestic transactions, pricing calculations and additional information for transactions meeting specified conditions.
Your preparation should therefore include consistent group-company identification, clear transaction categories and supporting calculations. The change involves the information you report, as well as the form number.
What Documents Should You Prepare?
Start with a complete record of transactions between your subsidiary and relevant group companies.
Your working file should include:
- Group details: Ownership structure, related-company details and countries of tax residence.
- Agreements: Contracts explaining the services, goods, funding or rights provided.
- Transaction records: Invoices, ledger entries, payment records and reconciled annual amounts.
- Business responsibilities: Details of the work performed, assets used and risks carried by each company.
- Pricing support: The method selected, comparable information, calculations and any necessary adjustments.
These records support the accountant’s review and explain the basis of your pricing.Ask your overseas parent for information early. Group policies, cost allocation workings and details of services received may take time to collect.
Practical note: A signed agreement explains the arrangement, but your supporting records should also show what happened during the year and how the amounts were calculated.
Transfer Pricing Compliance Calendar
Keep statutory deadlines separate from your internal preparation schedule.
| Requirement | Deadline | Main responsibility |
|---|---|---|
| Form 3CEB | 31 October 2026 | Chartered accountant and Indian finance team |
| Income-tax return | 30 November 2026 | Indian tax and finance team |
| Form 3CEAA, where applicable | 30 November 2026 for this category | Indian finance team and group tax team |
| Form 3CEAB, where a designated master-file filing arrangement is used | At least 30 days before the Form 3CEAA deadline | Designated Indian entity and group tax team |
Form 3CEB is due one month before the applicable return deadline. Master-file reporting follows the return deadline, with an earlier designation requirement where applicable.
Deadline notice: CBDT Circular 07/2026 extended certain other audit and return deadlines to 21 October and 21 November 2026. It covers the category specified in that circular. It does not extend the separate transfer pricing dates above.
Planning for Tax Year 2026–27
Under the current provisions, the standard dates for the next reporting cycle are:
- Form 48: 31 October 2027.
- Income-tax return for taxpayers requiring the Section 172 report: 30 November 2027.
These follow the requirement to furnish the accountant’s report one month before the return deadline. Check for subsequent amendments or extensions before filing.
Suggested Internal Preparation Schedule
Use the following as planning targets rather than statutory dates:
| When | What to do |
|---|---|
| Throughout the year | Record group transactions and review new agreements or charging arrangements |
| April–June after year-end | Reconcile accounts and request information from overseas teams |
| July–September | Complete pricing analysis and resolve missing information |
| Before the report deadline | Finalise the accountant’s review and complete submission |
| Before the return deadline | Reconcile the tax computation, reported transactions and any adjustments |
Assign an owner to each task. Leave time to resolve differences between your subsidiary’s books and the parent company’s records.
Master File and Country-by-Country Reporting
These are separate obligations. Filing the accountant’s report does not replace them.
The related forms have also changed under the 2026 rules:
| Purpose | Earlier form | Corresponding new form |
|---|---|---|
| Master file | 3CEAA | 56 |
| Designated master-file entity intimation | 3CEAB | 57 |
| Country-by-country reporting intimation | 3CEAC | 58 |
| Country-by-country report | 3CEAD | 59 |
| Designated country-by-country reporting entity intimation | 3CEAE | 60 |
Use the form appropriate to the reporting period and applicable transition rules.
Master File
The master file describes the wider international group. Detailed reporting generally requires group revenue exceeding ₹500 crore, together with international transactions exceeding ₹50 crore or specified intangible-property transactions exceeding ₹10 crore.
Important note: Part A remains applicable to constituent entities even when the thresholds for detailed reporting are not met. A valid designated-entity arrangement may allow one Indian entity to file for multiple entities.
Country-by-Country Reporting
Country-by-country reporting summarises a large group’s activities across jurisdictions. Applicability depends on group revenue, the reporting entity and other conditions.
For reporting under the earlier framework, Rule 10DB specifies a ₹6,400 crore group-revenue threshold. Relevant notification requirements generally run two months before the report deadline, while covered local reporting generally follows a 12-month period after the reporting accounting year ends. Special cases can differ.
Confirm the group’s reporting accounting year. Its year-end may differ from your Indian subsidiary’s financial year, so these dates should be tracked separately.
Final Thoughts
Confirm the reporting year first, then identify the transactions, forms and deadlines that apply. Keep your Indian finance team, overseas group team and accountant working from the same records and calendar.
For the current filing season, Form 3CEB remains relevant for FY 2025–26. At the same time, prepare your current-year records for Form 48 and the corresponding new group-reporting forms.
FAQ'S
No. The requirement depends on covered transactions. Foreign ownership alone does not establish that the report is required.
A loss does not itself remove the reporting requirement. You must assess whether your subsidiary entered into covered transactions.
The study supports your pricing through analysis and calculations. Form 3CEB is the prescribed accountant’s report. They serve different purposes.
Form 48 applies under the new framework from Tax Year 2026–27. FY 2025–26 reporting continues under the earlier framework.
Their applicability differs. Review basic master-file reporting, detailed reporting thresholds and country-by-country obligations separately.
