Evolving Landscape For Transfer Pricing In India

The Indian Transfer Pricing ("TP") landscape is undergoing a significant shift. The transition to a new legislative framework signals a move toward administrative modernization, enhanced compliances, reduced litigation and ease of doing business. The key legislative pillars driving this change are outlined below:

• The new Income-tax Act, 2025 (2025 IT Act) - The 2025 IT Act has been already enacted into law and has replaced the current Income-tax Act, 1961 (1961 IT Act) effective from 1^st April 2026. The 2025 IT Act introduces a revamped TP regime while preserving the core principles of the previous framework;
• Union Budget 2026–2027 (Budget 2026) - On 1 February 2026, the Indian Government presented the Budget 2026 introducing key TP proposals to align with rapidly reconfiguring global value chains and dealing with geopolitical uncertainties; and