Rule 85: Accountant’s transfer-pricing report in Form 48
Rule 85 prescribes Form 48 for the accountant’s report required by section 172. It covers persons entering into international or specified domestic transactions during a tax year and requires the report to be verified in the form’s prescribed manner.
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Bare law
Rule 85 - Report from an accountant to be furnished under section 172
(1) The report from an accountant, as defined in section 515(3)(b), required to be furnished under section 172 by every person who has entered into an international transaction or a specified domestic transaction during a tax year, shall be in Form No. 48 and be verified in the manner indicated therein.
(2) The report referred to in sub-rule (1) shall be furnished at least one month prior to the due date of furnishing return of income as per section 263(1)(c).
Rule breakdown
Identify the transactions and reporting obligation
The report is required for the section 172 cases involving international or specified domestic transactions during the tax year. Start by identifying all transactions that fall within those statutory categories.
Do not decide the reporting scope solely from the name of the counterparty or the payment description; review the underlying arrangement and statutory definitions.
Use Form 48 and an eligible accountant
The rule specifies Form 48 and the accountant defined in section 515(3)(b). The report must be verified in the manner indicated in the prescribed form.
Provide the accountant with the transaction list, agreements, ledger reconciliation, method analysis and supporting computations so the report can be checked against the actual records.
Calendar the report before the return
Sub-rule (2) prescribes filing at least one month before the return due date and prints a reference to section 263(1)(c). Check the current Act’s applicable return-date provision and any valid extension before finalising the calendar.
Do not assume the report can wait until the return filing date. Keep a separate deadline and evidence of completed filing for each required document.
Reconcile the report with the tax computation
Match reported transaction amounts and categories with the books, transfer-pricing file and income computation. Resolve differences in transaction grouping or adjustments before filing.
The report and supporting Rule 84 documentation serve different functions. Completing the report does not replace the underlying analysis and record retention.
Key takeaways
Form 48
Use the prescribed accountant’s report.
Separate filing clock
The rule requires filing at least one month before the applicable return due date.
Verified reporting
Follow the verification required in the form.
Practical checklist
- Identify all reportable transactions.
- Use the prescribed form and eligible accountant.
- Reconcile the report to the books and arm’s-length computations.
- Maintain a separate filing deadline and acknowledgment.
Avoid
- Do not substitute a general certificate for the prescribed form.
- Do not assume the return deadline is also the report deadline.
FAQs
Which form is prescribed for the section 172 report?
Form 48, verified in the manner indicated in it.
Can the report be filed together with the return on its due date?
The rule requires the report at least one month before the return due date, subject to checking the current applicable law and any valid extension.
Does the report replace the transfer-pricing documentation?
No. The report requirement and Rule 84’s supporting documentation requirements should both be considered.
Glossary
- Form 48
- The accountant’s report prescribed by Rule 85 for section 172.
- Verification
- The confirmation required in the manner indicated in the prescribed form.