Rule 104: Who can apply for an advance pricing agreement
Rule 104 makes the APA framework available both to a person who has undertaken an international transaction and to one contemplating such a transaction. Eligibility under this short rule must be distinguished from filing deadlines and eventual agreement approval.
Official notified Income-tax Rules, 2026Need advice on Rule 104?
This article is for general information. Read the official Rules and applicable Act amendments, including the Taxation and Other Laws (Amendment) Act, 2026. If you need professional advice for your situation, contact Bizeneed.
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Bare law
Rule 104 - Persons eligible to apply
A person shall be eligible to enter into an agreement under these rules, if he — (a) has undertaken an international transaction; or (b) is contemplating to undertake an international transaction.
Rule breakdown
Existing and contemplated transactions are both recognised
The two alternatives are an international transaction already undertaken or one the person is contemplating. A new cross-border arrangement need not already be operating to fall within the eligibility wording.
Identify the proposed transaction and parties sufficiently to assess the statutory international-transaction category.
Eligibility does not override filing timing
Rule 106 sets separate application timing for continuing dealings and remaining transactions. A person’s broad eligibility under Rule 104 does not extend those deadlines.
Start planning before the relevant tax year or new transaction begins, as applicable, and check the precise procedural requirements.
Select the intended scope before applying
Map the transactions, countries, intended years and associated-enterprise facts. Consider whether unilateral, bilateral or multilateral treatment fits the case.
A contemplated transaction should be described with supportable proposed functions, assets, risks and commercial terms, rather than an unspecified future project.
Prepare for the subsequent process
Review the optional pre-filing consultation, formal application, fee and supporting evidence before proceeding. The Board’s agreement process remains separate from this eligibility rule.
Keep the business team and tax advisers aligned on when the transaction will start and which facts are still subject to change.
Key takeaways
Existing or contemplated
Both alternatives appear in the rule.
International transaction required
The statutory transaction category must fit.
Deadlines remain separate
Read Rule 106 before deciding when to file.
Practical checklist
- Identify the existing or contemplated international transaction.
- Plan the application before the applicable deadline.
- Document proposed facts and intended agreement scope.
Avoid
- Do not confuse broad eligibility with automatic approval.
- Do not postpone timing review until the transaction has started.
FAQs
Must the transaction already have begun?
No. The rule also covers a person contemplating an international transaction.
Does eligibility guarantee an APA?
No. The application and agreement procedures and requirements still apply.
Can an eligible person ignore the application deadline?
No. Rule 106’s separate timing requirements must be checked.
Glossary
- Contemplated transaction
- An international transaction the person is considering undertaking, as recognised by clause (b).