Section 171 — TP Documentation Master File CbC | ITA 2025

Section 171 — - DOCUMENTATION REQUIREMENT

Section 171 is the substantive equivalent of 1961 s. 92D and s. 286 (BEPS Action 13 implementation). It mandates maintenance and furnishing of TP DOCUMENTATION for international transactions. Three-tier framework per OECD BEPS Action 13: (a) MASTER FILE (Form 3CEAA Part A) -- group overview / global structure / financial information / intangibles / financing -- mandatory for groups with consolidated revenue > INR 500 crore (Rule 10DA); (b) LOCAL FILE (Rule 10D) -- 13 categories of detailed Indian-entity documentation; (c) COUNTRY-BY-COUNTRY (CbC) Report (Form 3CEAD) -- country-wise revenue / tax / employees / assets -- mandatory for groups with consolidated revenue > INR 5,500 crore. Failure penalties: INR 5K-INR 5L per default. Pre-filing notification (Form 3CEAB) for parent-jurisdiction CbC filing.

Statutory text — Income-tax Act, 2025

Marginal note -- Documentation requirement

(1) Every person, who—

(a) has entered into an international transaction or specified domestic transaction; or

(b) is a constituent entity of an international group, shall keep and maintain such information and document in respect thereof and for such period and in such manner, as may be prescribed.

(2) The Assessing Officer or the Commissioner (Appeals) may, during any proceeding under this Act, require any person referred to in sub-section (1)(a) to furnish any information or document referred therein within ten days from the date of receipt of a notice issued in this regard.

(3) For the purposes of sub-section (2), the Assessing Officer or the Commissioner (Appeals) may, on an application made by such person, extend the period of ten days by a further period not exceeding thirty days.

(4) Every person referred to in sub-section (1)(b) shall furnish the information and document referred to in sub-section (1) to the authority prescribed under section 511(1), in such manner, on or before such date, as may be prescribed.

(5) For the purposes of this section,—

(a) “constituent entity” shall have the meaning assigned to it in section 511(10)(d);

(b) “international group” shall have the meaning assigned to it in section 511(10)(g). Report from an accountant to be furnished by persons entering into inter- national transaction or specified domestic transaction.

Corresponding provision — 1961 regime

INCOME-TAX ACT, 2025	INCOME-TAX ACT, 1961
INCOME-TAX ACT, 2025 -- s. 171	INCOME-TAX ACT, 1961
Local file documentation 13 clauses (Rule 10D)	1961 s. 92D
Master File (Rule 10DA) -- INR 500 crore consolidated revenue threshold	1961 s. 92D + Rule 10DA [FA 2017]
Country-by-Country (CbC) Report Form 3CEAD -- INR 5,500 crore	1961 s. 286 [FA 2016]
Notification Form 3CEAB	1961 s. 286(1)

THREE-TIER ARCHITECTURE

(I) LOCAL FILE (Rule 10D 13 clauses): (a) Enterprise overview; (b) Group ownership structure; (c) Business operations description; (d) International transaction details; (e) FAR analysis (functions / assets / risks); (f) Industry analysis; (g) Comparable selection process; (h) Method choice rationale; (i) Financial computation working; (j) Adjustments documentation; (k) ALP determination; (l) Other documents. Threshold: aggregate IT > INR 1 crore per assessee. (II) MASTER FILE (Rule 10DA / Form 3CEAA Part A): Group-level overview: organisational structure, business overview, intangibles, intra-group financing, financial / tax position. Threshold: consolidated group revenue > INR 500 crore. Form 3CEAA Part B is the assessee-specific intimation. Filing: by 30-Nov following relevant tax year. (III) COUNTRY-BY-COUNTRY (CbC) REPORT (Form 3CEAD / Form 3CEAB notification): Country-wise revenue, profit/loss, taxes paid / accrued, employees, tangible assets, retained earnings. Threshold: consolidated group revenue > INR 5,500 crore (~USD 750M). Filing: by 12 months after relevant tax year-end. Pre-filing intimation Form 3CEAB.

PENALTIES

(i) Local File non-maintenance: 2% of value of international transaction. (ii) Master File non-furnishing: INR 5,00,000. (iii) Master File false / inaccurate info: INR 5,00,000. (iv) CbC Report non-furnishing: INR 5,000-INR 5,00,000 per day of default. (v) CbC Report false: INR 5,00,000.

PLANNING NOTES

(i) THRESHOLD VERIFICATION -- INR 500 cr consolidated revenue (Master File) and INR 5,500 cr (CbC) annual; review group consolidated financials. (ii) PARENT FILING ELECTION -- if group's parent jurisdiction has equivalent CbC framework + tax-treaty exchange, Indian subsidiary may NOT need to file CbC; intimation Form 3CEAB to that effect. (iii) MASTER FILE PREPARATION -- usually prepared by global TP team / consultant; localise for India. (iv) LOCAL FILE -- CA / TP-consultant prepares 60-90 days before due date; coordinate with Form 3CEB filing.

CROSS-REFERENCES

Section 161 / 165 / 166 -- TP charging / ALP / TPO.
Section 286 -- CbC framework.
Income-tax Rules, 2026 r. 10D / 10DA / 10DB -- Local / Master / CbC.
Form 3CEAA / 3CEAB / 3CEAD / 3CEB.
BEPS Action 13 -- three-tier documentation.

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