Chapter X - Special Provisions Relating to Avoidance of Tax
Section 171
Section 171: maintaining and furnishing transfer pricing information and documents
Section 171 is the documentation backbone of the transfer pricing regime - it requires persons who have entered into an international transaction or specified domestic transaction, and constituent entities of international groups, to keep records and furnish them to the tax authorities on request or by a prescribed date.
On this page
Need advice on Section 171?
This article is for general information. Refer to the Income-tax Act, 2025 as amended by the Finance Act, 2026 and the Taxation and Other Laws (Amendment) Act, 2026 for the official provisions. If you need professional advice for your situation, contact Bizeneed.
Statutory text
Bare law
(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).
Introduction
Section 171 requires specified persons to keep and furnish information and documents for international or specified domestic transactions. Its documentation and response obligations support the arm's-length analysis and may apply to constituent entities under special reporting rules.
Key takeaways
Transfer-pricing records
A person entering an international or specified domestic transaction, or a constituent entity of an international group, must keep the prescribed information and documents.
Retention and production
The records must be maintained for the prescribed period and furnished on request as the section requires; transaction-specific facts and comparability support matter.
Who must keep records, and what
Every person who has entered into an international transaction or specified domestic transaction, or who is a constituent entity of an international group, must keep and maintain such information and document in respect of it, for such period and in such manner, as may be prescribed.
Furnishing information on request
The Assessing Officer or the Commissioner (Appeals) may, during any proceeding under the Act, require a person who has entered into an international or specified domestic transaction to furnish the information or document within ten days from receipt of a notice.
On an application by that person, the Assessing Officer or Commissioner (Appeals) may extend this ten-day period by a further period not exceeding thirty days.
Furnishing by constituent entities of an international group
A constituent entity of an international group must furnish the prescribed information and document to the authority prescribed under Section 511(1), in the manner and by the date prescribed.
Key definitions
"Constituent entity" has the meaning assigned to it in Section 511(10)(d), and "international group" has the meaning assigned to it in Section 511(10)(g).
Step-by-step flow for applying Section 171
- 1
Has the person entered into an international or specified domestic transaction, or is it a constituent entity of an international group?
- Neither: Section 171 does not apply.
- Either: Keep and maintain the prescribed information and documents, for the prescribed period and in the prescribed manner.
- 2
Has a notice been received from the Assessing Officer or Commissioner (Appeals) in a proceeding?
This applies to persons with international or specified domestic transactions.
- Yes: Furnish the information within ten days of receiving the notice.
- 3
Is more time needed?
- Yes: Apply for an extension. The authority may extend the period by up to thirty more days.
- 4
Is it a constituent entity of an international group?
- Yes: Furnish the information to the authority prescribed under Section 511(1), in the prescribed manner and by the prescribed date.
Practical checklist
Do
- Maintain contemporaneous transaction, functional, pricing-method and comparable-data records in the prescribed form.
- Track notices and furnish requested information within the applicable statutory or extended period.
Avoid
- Do not rely only on a summary conclusion without underlying transfer-pricing workpapers.
- Do not ignore a qualifying domestic transaction merely because no foreign counterparty exists.
Illustrative example
Worked example: responding to a notice for documents
Hypothetical facts (illustration only, not a real taxpayer): A company that pays an associated enterprise abroad for services receives a notice from the Assessing Officer on 5 June (assumed date), asking for its transfer pricing documentation for the year.
Base time limit
Ten days from receipt of the notice runs to 15 June.
Extension
The company applies for more time. The Assessing Officer may extend the period by up to thirty days, so the latest possible date is 15 July.
What to furnish
The information and documents it was required to keep under Section 171(1), as prescribed.
Consequence of failure
If it does not furnish them within the specified time, the Assessing Officer has a ground to determine the arm's length price himself under Section 165(4)(d).
Outcome
- Keep the documentation ready before any notice, because ten days is short.
- Group-level reporting by a constituent entity of an international group is a separate obligation, linked to Section 511.
Glossary
- Contemporaneous documentation
- Pricing evidence maintained for the relevant transaction and tax year.
- Specified domestic transaction
- The Section 164 category requiring documentation when its conditions are met.
Frequently asked questions
How long does a taxpayer have to respond to a documentation request under Section 171?
Ten days from the date of receipt of the notice, which the Assessing Officer or Commissioner (Appeals) may extend by up to a further thirty days on application.
Does Section 171 apply only to taxpayers with international transactions?
No - it also applies to any person who is a constituent entity of an international group, and to persons with specified domestic transactions, not just international transactions.
Who has to furnish information to the authority prescribed under Section 511(1)?
A person that is a constituent entity of an international group. It must furnish the information and documents it keeps under Section 171(1) to that authority, in the prescribed manner and on or before the prescribed date. "Constituent entity" and "international group" take their meanings from Section 511(10)(d) and (g).
Need help applying this provision to your situation?
Get help with transfer pricing documentation from our tax teamLast updated 10 October 2026