Computation of income from international transaction having regard to arm's length price
Section 92 of the Income-tax Act, 1961 deals with computation of income from international transaction having regard to arm's length price. Any income arising from an international transaction shall be computed having regard to the arm's length price. The Act came into force on 01 Apr 1962. Repealed by the Income-tax Act, 2025 with effect from 1 April 2026, but conduct before that date is still charged, tried and appealed under it.
(1) Any income arising from an international transaction shall be computed having regard to the arm's length price.
Explanation.—For the removal of doubts, it is hereby clarified that the allowance for any expense or interest arising from an international transaction shall also be determined having regard to the arm's length price.
(2) Where in an international transaction or specified domestic transaction, two or more associated enterprises enter into a mutual agreement or arrangement for the allocation or apportionment of, or any contribution to, any cost or expense incurred or to be incurred in connection with a benefit, service or facility provided or to be provided to any one or more of such enterprises, the cost or expense allocated or apportioned to, or, as the case may be, contributed by, any such enterprise shall be determined having regard to the arm's length price of such benefit, service or facility, as the case may be. (2A) Any allowance for an expenditure or interest or allocation of any cost or expense or any income in relation to the specified domestic transaction shall be computed having regard to the arm's length price.
(3) The provisions of this section shall not apply in a case where the computation of income under sub-section (1) or sub-section (2A) or the determination of the allowance for any expense or interest under sub-section (1) or sub-section (2A), or the determination of any cost or expense allocated or apportioned, or, as the case may be, contributed under sub-section (2) or sub-section (2A), has the effect of reducing the income chargeable to tax or increasing the loss, as the case may be, computed on the basis of entries made in the books of account in respect of the previous year in which the international transaction or specified domestic transaction was entered into.
Meaning of associated enterprise.
Section 92, The Income-tax Act, 1961 (Act 43 of 1961).
Now in the Income-tax Act
INCOME-TAX-ACT-2025 161 Computation of income from international transaction and specified domestic transaction having regard to arm's length price Official correspondence
Measured by comparing the text of the two provisions, not taken from an official correspondence table — there is no machine-readable one. See both texts side by side before relying on it.
Both regimes are live. The repealed enactment still governs what happened while it was in force. We never redirect one to the other.
Cross-references
Extracted from the operative text of the enactments themselves. Every destination below exists in our corpus.
Referred to by 10
- Finance Act s. 49 Substitution of new sections for section 92
- Finance Act s. 39 Substitution of new section for section 92
- Finance Act s. 34 Amendment of section 92
- s. 2 Definitions
- s. 92A Meaning of associated enterprise
- s. 92B Meaning of international transaction
- s. 92BA Meaning of specified domestic transaction
- s. 92F Definitions of certain terms relevant to computation of arm's length price, etc
- s. 94A Special measures in respect of transactions with persons located in notified jurisdictional area
- Income-tax Rules s. 10D Information and documents to be kept and maintained under section 92D
Related judgements & precedents
These are some judgments that construed this section, and hold precedence value. They hold authority on how to read, interpret and use this section.
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The Income Tax Officer 2 vs Sheetal Dharmeshbhai Patel
Court's Decision & Legal Precedent
The assessing officers' transfer pricing determinations must be guided by proper application of Section 92 and related transfer pricing provisions of the Income Tax Act. Where an assessee fails to demonstrate that the prices charged in cross-border related party transactions meet the arm's-length standard required by law, the revenue authorities are justified in making transfer pricing adjustments based on proper analysis of the facts and prescribed methodologies. The onus is on the assessee to prove the arm's-length nature of their transfer pricing, and inadequate or non-compliant documentation constitutes a failure to discharge this burden.
On this section: The primary statutory framework governing transfer pricing in India; the Court applied these sections to examine whether assessees had properly determined arm's-length prices for their cross-border related party transactions
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The Pr. Commissioner of Income Tax -3 v. Fujitsu India Private Limited
Court's Decision & Legal Precedent
DATE-VERIFIED Final Order 12.10.2023 (order-3.pdf): Revenue’s s.260A appeals dismissed. For a pure distributor reselling AE goods without value addition, Resale Price Method is the most appropriate method to compute arm’s length income from the international transaction; ITAT rightly rejected TPO/DRP TNMM absent comparables supporting a risk-bearing full-fledged distributor characterisation (Matrix Cellular; Nokia India / Swarovski / Mattel / L’Oreal lines).
On this section: Teaches s.92: income from international transactions must be computed at ALP using the method suited to the FAR profile — RPM for pure resale.
The holding above is the ratio decidendi as extracted from the judgment by eCourts India, reproduced unaltered — it is a rendering of the court's reasoning, not a substitute for its words. Read the order itself before relying on it.
Questions about Section 92
What have the courts held on Section 92 of the Income-tax Act?
The Income Tax Officer 2 vs Sheetal Dharmeshbhai Patel (03 Oct 2024) is the leading judgment on this section among those set out below: The primary statutory framework governing transfer pricing in India; the Court applied these sections to examine whether assessees had properly determined arm's-length prices for their cross-border related party transactions. Another 1 judgment on this section is set out below, 1 of them from the Supreme Court. They run from 2023 to 2024.
How do I find court cases under Section 92 of the Income-tax Act?
In judgments and charge sheets this section is written several ways, and each form finds a different set of orders. These search the full text of every order eCourtsIndia holds, best matches first: Income Tax Act 92, section 92 Income Tax Act, section 92 of the Income-tax Act. Each opens the full list of orders on eCourtsIndia, where it can be narrowed by court, year and outcome. 2 reported judgments on this section are set out on this page, beginning with The Income Tax Officer 2 vs Sheetal Dharmeshbhai Patel (03 Oct 2024).
What should I read with Section 92 of the Income-tax Act, and has it changed?
10 other provisions in this corpus refer back to it. For anything done on or after 1 April 2026 the provision to read is Income-tax Act, 2025, section 161 (Computation of income from international transaction and specified domestic transaction having regard to arm’s length price), which replaced it; conduct before that date is still charged, tried and appealed under this section.
When did Section 92 of the Income-tax Act come into force?
Section 92 of the Income-tax Act, cited as Income Tax Act 92, came into force on 01 Apr 1962, having been enacted on 13 Sep 1961. It is no longer in force.
Other sections of this Act
- 10. Incomes not included in total income30885 words
- 2. Definitions11419 words
- 80HHF. Deduction in respect of profits and gains from export or transfer of film software, etc7148 words
- 80-IB. Deduction in respect of profits and gains from certain industrial undertakings other than infrastructure development undertakings5474 words
- 155. Other amendments5451 words
- 139. Return of income5400 words
Source and method. Compiled from the enactments of Parliament and of the State legislatures as published on India Code, and republished together with commentary and other original matter under section 52(1)(q)(ii) of the Copyright Act, 1957. Structured, cross-referenced and maintained by eCourtsIndia. Recovered from the consolidated text published by the Income Tax Department, as amended by the Finance Act, 2026. India Code holds no record of this Act in any form. This page is not a substitute for legal advice.