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On February 1, 2025, the Hon'ble Finance Minister presented the Budget, marking the completion of 10 years of the Modi Government and her 8th consecutive year of presenting the Budget. The Finance Min...
The transfer pricing landscape in India has undergone a significant transformation over the last couple of decades, driven by the growing complexity of cross-border transactions and the need for greater tax certainty. Among the various policy reforms introduced to streamline compliance and reduce litigation, one of the most notable developments has been the implementation of safe harbour rules. The safe harbour rules were introduced to reduce the administrative burden on both the taxpayer and the tax authorities by bringing in certainty and reducing litigation.
In this article, INDUSLAW’s Lokesh Shah and Saloni Shital aim to demystify the concept of safe harbour rules under Indian transfer pricing regulations. We explore the rationale behind their introduction, the key provisions that define their scope, and assess their relevance and adoption in practice. Despite being a well-intentioned reform, safe harbour rules have not received widespread traction or attention over the years—an outcome that warrants a closer examination.
