Income Tax

CBDT expands the scope of Safe Harbour Rules

CBDT notifies amendments in Income Tax Rules 1962 to expand the scope of Safe Harbour Rules

Section 92BC of the Income Tax Act 1961 inter alia empowers the CBDT to make safe harbour rules for the determination of arm’s length price under section 92C or section 92CA.

The CBDT has notified Notification No. 21/2025 dated 25.03.2025 expanding the scope of safe harbour rules by:

(a) Increasing the threshold for availing the Safe Harbour Rules from Rs. 200 crores to Rs. 300 crores.

(b) Including the “lithium ion batteries for use in electric or hybrid electric vehicles” in the definition of core auto components.

To provide tax certainty to the assessee opting for safe harbour, the amendment are applicable to two assessment years 2025-26 and 2026-27.

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