Rule 115: Revision of an advance pricing agreement
Rule 115 permits revision of an APA after it has been entered into. The rule identifies the grounds and initiating parties, protects the assessee’s participation and requires clear dates for the original and revised agreement.
Official notified Income-tax Rules, 2026Need advice on Rule 115?
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Rule 115 - Revision of an agreement
(1) An agreement, subsequent to it having been entered into, may be revised by the Board, if, — (a) there is a change in critical assumptions or failure to meet a condition subject to which the agreement has been entered into; or (b) there is a change in law that modifies any matter covered by the agreement but is not of the nature which renders the agreement to be non-binding; or (c) there is a request from competent authority of the other country requesting revision of agreement, in case of bilateral or multilateral agreement.
(2) An agreement may be revised by the Board, either suo motu, or on request of the assessee, or the competent authority of India, or the Principal Chief Commissioner of Income-tax (International Taxation).
(3) Except when the agreement is proposed to be revised on the request of the assessee, the agreement shall not be revised unless an opportunity of being heard has been provided to the assessee and the assessee is in agreement with the proposed revision.
(4) In case the assessee is not in agreement with the proposed revision, the agreement may be cancelled in accordance with rule 116.
(5) In case the Board is not in agreement with the request of the assessee for revision of the agreement, the Board shall reject the request in writing giving reason for such rejection.
(6) For the purpose of arriving at the agreement for the proposed revision, the procedure provided in rule 109 may be followed, so far as they apply.
(7) The revised agreement shall include the date till which the original agreement is to apply and the date from which the revised agreement is to apply.
Rule breakdown
Identify a permitted revision ground
The grounds include a critical-assumption change or failure of a condition, a legal change modifying a covered matter without rendering the agreement non-binding, and a foreign competent-authority request in a bilateral or multilateral case.
Explain the particular ground and its effect on the covered transactions rather than proposing an unexplained new price.
Who can initiate revision
The Board may act on its own or on a request by the assessee, India’s competent authority or the Principal Chief Commissioner of Income-tax (International Taxation).
Keep the request and supporting factual or legal changes aligned with the notice duties under Rule 110.
Hearing and agreement safeguards
Except where revision is proposed at the assessee’s request, the agreement cannot be revised without a hearing opportunity and the assessee’s agreement to the proposed revision.
If the assessee does not agree, cancellation may follow under Rule 116. Disagreement is therefore not necessarily a guarantee that the original agreement continues unchanged.
Written reasons and clear effective dates
If the Board rejects the assessee’s revision request, it must do so in writing with reasons. The Rule 109 procedure may be followed to arrive at the proposed revision, so far as applicable.
The revised agreement must state until when the original agreement applies and from when the revised one applies. Reconcile computations to those dates.
Key takeaways
Specified grounds
Connect the request to the rule’s revision grounds.
Participation safeguards
The hearing and assent provision applies to the stated cases.
Effective dates matter
The revised agreement divides the original and revised periods.
Practical checklist
- Document the revision ground and changed facts.
- Review proposed terms and effective dates.
- Retain written requests, decisions and notices.
Avoid
- Do not assume disagreement automatically freezes the original terms.
- Do not apply revised pricing to the wrong period.
FAQs
Can the Board reject an assessee’s request without reasons?
Sub-rule (5) requires written rejection with reasons.
Does disagreement always preserve the original APA?
Sub-rule (4) permits cancellation under Rule 116 where the assessee does not agree to the proposed revision.
Must the revised agreement state its starting date?
Yes, together with the date until which the original applies.
Glossary
- Revision
- A permitted change to an existing APA through Rule 115, with defined application dates.