Information and documents to be kept and maintained under section 171(1)

What to keep (sub-rule 1). The ownership structure of the assessee; a profile of the multinational group and the associated enterprises dealt with; a broad description of the business and industry; the nature and terms, including prices, of each transaction, with property transferred or services provided and the value of each; functions performed, risks assumed and assets employed; economic and market analyses, forecasts and budgets; a record of the uncontrolled transactions considered for comparability and the analysis of comparability; the methods considered, the one selected as most appropriate with reasons and how it was applied; the actual working, data and adjustments; the assumptions, policies and price negotiations that critically affected the price; any adjustments made to align transfer prices with arm's length prices and to total income; and any other relevant information.

Small transactions (sub-rules 2 and 3). Sub-rule (1) does not apply where the aggregate value, as recorded in the books, of international transactions in the tax year does not exceed one crore rupees; the assessee must then substantiate, on the material available, that the income from those transactions has been computed under section 161.

Eligible specified domestic transactions (sub-rule 4). Sub-rule (1) does not apply to an eligible specified domestic transaction (rule 96) of an eligible assessee (rule 95), who instead keeps a shorter list: for the rule 95(a) assessee, the ownership structure, a description of the business, the nature and terms of each transaction, any regulatory commission proceedings and orders, the working, the assumptions, and other relevant information; for the rule 95(b) assessee (a co-operative society), the ownership structure, a description of members, the nature and terms of each transaction with members, the working, the assumptions, documentation that the price is declared routinely and transparently and is in the public domain, and other relevant information.

Supporting documents and timing (sub-rules 5 to 8). The information is supported by authentic documents, which may include Government and other official publications and databases; market research and technical publications of institutions of repute; price publications including stock exchange and commodity quotations; published accounts of associated enterprises; agreements with associated or unrelated enterprises; correspondence documenting negotiated terms; and documents generally issued in connection with the transactions. The records should as far as possible be contemporaneous and exist on the specified date referred to in section 173(d). A transaction continuing beyond one tax year does not need fresh documentation each year unless there is a significant change in its nature or terms, its assumptions or another factor affecting the price. The records are kept for nine years from the end of the relevant tax year.