Section 164
Section 164: meaning of "specified domestic transaction"
Section 164 defines which purely domestic (non-international) transactions are still brought within the transfer pricing rules of Chapter X. It lists specific categories tied to Chapter VIII deductions and certain other provisions, and - importantly - the whole definition only bites once the aggregate value of such transactions in a tax year crosses ₹20 crore.
This explanation is AI-assisted and pending review by our CA/CS team. It is general information, not professional advice - always cross-check against the bare law text above or talk to our tax team for guidance specific to your situation.
What counts as a specified domestic transaction
For the purposes of this Chapter, "specified domestic transaction", in the case of an assessee, means any of the following transactions (not being an international transaction):
- Any transaction referred to in section 122.
- Any transfer of goods or services referred to in section 140(9).
- Any business transacted between the assessee and another person as referred to in section 140(13).
- Any transaction referred to in any other section under Chapter VIII to which the provisions of section 140(9) or 140(13) of this Act, or section 80-IA(8) or (10) of the Income-tax Act, 1961, apply.
- Any business transacted between the persons referred to in section 205(4).
- Any other transaction as may be prescribed.
The ₹20 crore threshold
These transactions are treated as "specified domestic transactions" only where the aggregate of such transactions entered into by the assessee in a tax year exceeds a sum of ₹20 crore.
Frequently asked questions
Is every related-party domestic transaction covered by transfer pricing rules?
No - only the categories listed in Section 164 (tied to specific Chapter VIII deduction provisions and section 205(4), plus any other prescribed transaction), and only if their aggregate value in the tax year exceeds ₹20 crore.
What is the monetary threshold for specified domestic transactions?
₹20 crore - the aggregate of the listed transactions entered into by the assessee in a tax year must exceed this amount for Chapter X's transfer pricing rules to apply to them.
Does this section cover cross-border transactions too?
No - the definition expressly excludes anything that is an "international transaction" (which is separately dealt with elsewhere in this Chapter).
Related sections
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Talk to our team about specified domestic transaction complianceLast updated 9 September 2026