Rule 94: Domestic safe harbour definitions
Rule 94 imports two definitions used by the domestic safe harbour rules: Appropriate Commission under the Electricity Act, 2003, and Government company under the Companies Act, 2013. These definitions help decide which electricity businesses and tariff decisions can enter the framework in Rules 95–98.
Official notified Income-tax Rules, 2026Need advice on Rule 94?
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Rule 94 - Definitions for safe harbour rules for specified domestic transaction
For the purposes of this rule and rules 95 to 98, — (a) "Appropriate Commission" shall have the same meaning as assigned to it in section 2(4) of the Electricity Act, 2003 (36 of 2003); and (b) "Government company" shall have the same meaning as assigned to it in section 2(45) of the Companies Act, 2013 (18 of 2013).
Introduction
A safe harbour definition does not itself approve a transaction. First identify the correct entity and regulator, then apply the separate assessee, transaction, pricing and procedure rules.
Rule breakdown
Where Rule 94 applies
The opening words apply these meanings to Rule 94 and Rules 95–98. The electricity limb uses the statutory Appropriate Commission; the eligibility rule separately requires the electricity assessee to be a Government company.
How to check the entity and regulator
Obtain the company’s incorporation and ownership records and evaluate the Companies Act definition referred to in clause (b). Identify the Commission responsible for the tariff or methodology in the relevant electricity transaction.
Keep the actual tariff order or methodology approval alongside the assessment-year or tax-year records. A trading name or a general statement that a business is regulated does not establish these statutory facts.
What this rule does not decide
Rule 94 does not set a profit margin, determine a transfer price or prescribe an application deadline. Those questions belong to Rules 97 and 98 after eligibility is established.
Key takeaways
Two external definitions
The references are to the Electricity Act and Companies Act, not to identically numbered provisions of the Income-tax Act.
Read the whole framework
Rules 95–98 govern who qualifies, which transactions qualify, the accepted pricing conditions and the option procedure.
Practical checklist
- Identify the external enactment beside each section number.
- Retain ownership evidence and the relevant Commission order.
- Read Rules 95–98 together before exercising an option.
Avoid
- Do not treat every electricity supplier as a Government company.
- Do not substitute an unrelated income-tax definition for either external definition.
FAQs
Are both definitions taken from the Income-tax Act?
No. Appropriate Commission is defined by reference to section 2(4) of the Electricity Act, 2003; Government company by reference to section 2(45) of the Companies Act, 2013.
Does satisfying Rule 94 guarantee safe harbour?
No. The assessee, transaction, pricing and option conditions in the following rules must also be satisfied.