The Central Board of Direct Taxes (CBDT), Department of Revenue, Ministry of Finance, has released the Annual Report of India’s Advance Pricing Agreement Programme for Financial Year 2025-26. The report, titled “Towards a Predictable Tax Administration”, presents the progress, performance, reforms and statistical analysis of the Indian APA Programme during the year. This is the eighth Annual APA Report published by the CBDT.
The Advance Pricing Agreement Programme recorded its highest-ever annual performance since its introduction in India, with the CBDT signing 220 APAs during FY 2025-26. The agreements comprise 136 Unilateral APAs and 84 Bilateral APAs. With these signings, the total number of APAs entered into by the CBDT up to 31 March 2026 has reached 1,035, comprising 751 Unilateral APAs and 284 Bilateral APAs.
The signing of 84 Bilateral APAs during FY 2025-26 is also the highest number of BAPAs signed in any financial year since the launch of the programme. This represents an increase of more than 20 per cent over the 65 BAPAs signed during FY 2024-25.
During the year, India achieved another important milestone by signing its first-ever Bilateral APAs with France, Indonesia, Ireland and Sweden. The 84 BAPAs were concluded pursuant to mutual agreements with 12 treaty partners—the United States, Finland, the United Kingdom, Singapore, Japan, South Korea, Australia, Denmark, Sweden, France, Indonesia and Ireland.
Of the 84 BAPAs signed during the year, 39 related to the United States, nine to Finland, eight to Singapore, seven to the United Kingdom, six to Japan, three each to Denmark, South Korea and Australia, two each to France and Sweden, and one each to Ireland and Indonesia.
The Annual Report notes that the Indian APA Programme has cumulatively provided transfer-pricing certainty for 5,732 assessment years up to 31 March 2026. This includes 4,559 regular APA years and 1,173 rollback years. The 220 agreements signed during FY 2025-26 alone provided certainty for 1,332 assessment years, comprising 1,093 APA years and 239 rollback years.
The report observes that the APA Programme has emerged as an important mechanism for preventing and resolving transfer-pricing litigation. Based on a conservative assessment that approximately half of the covered assessment years could otherwise have resulted in disputes, the programme may have prevented or resolved litigation in more than 2,800 transfer-pricing matters.
A total of 215 new APA applications were received during FY 2025-26, comprising 112 Unilateral APA applications and 103 Bilateral APA applications. The number of BAPA applications received during the year was the highest recorded so far and reflects increasing taxpayer confidence in the bilateral process and India’s strengthening engagement with treaty partners.
Since the inception of the programme, a total of 2,277 APA applications have been filed up to 31 March 2026. Of these, 1,035 have resulted in signed agreements, 401 have been disposed of for other reasons and 841 applications remain under processing.
The median time taken for concluding Unilateral APAs during FY 2025-26 was 36 months, while the median time for concluding Bilateral APAs was approximately 38 months. The report highlights that around 45 per cent of UAPAs concluded during the year were resolved within two years and approximately 65 per cent within three years.
The average processing time for UAPAs declined to approximately 40.8 months during FY 2025-26, compared with 42.94 months during the preceding year. The average processing time for BAPAs also declined substantially to approximately 41.47 months, from 50.18 months in FY 2024-25.
Of the 136 UAPAs signed during the year, 98 primarily related to the services sector. The agreements covered companies engaged in information technology, banking and insurance, consultancy, pharmaceuticals, non-banking investment advisory services, trading and logistics, automotive activities, engineering services, healthcare and other sectors.
The Information Technology sector continued to have the largest representation under the Unilateral APA Programme, accounting for 55 of the 136 agreements signed during FY 2025-26. A total of 31 companies covered under the UAPAs also carried out manufacturing activities, while 27 were involved in trading activities.
The 136 UAPAs signed during the year covered 421 international transactions. Major transactions included the provision of IT-enabled services, export or sale of finished goods, receipt of management or corporate support services, payment of royalty or licence fees, software-development services, import of raw materials and reimbursement or recovery of expenses.
The Transactional Net Margin Method was the most frequently adopted transfer-pricing methodology in UAPAs, being applied to 239 transactions. The “Other Method” was applied to 168 transactions, while the Comparable Uncontrolled Price Method and Profit Split Method were used in selected cases.
The 84 BAPAs signed during FY 2025-26 provided simultaneous tax certainty in India and the respective treaty-partner jurisdictions for a total of 503 assessment years. Of these agreements, 32 contained rollback provisions covering 90 rollback years.
The service sector also accounted for the largest share of BAPAs, with 51 of the 84 bilateral agreements relating primarily to services. Information Technology was the leading industry, followed by automotive, general services, manufacturing, telecommunications, electronics, pharmaceuticals and other industries.
The 84 BAPAs covered 386 international transactions. These included software-development services, IT-enabled services, receivables and payables involving associated enterprises, royalty and licence-fee payments, marketing-support services, deemed international transactions and the purchase or sale of goods.
The report states that 86 of the 136 UAPAs signed during FY 2025-26 were renewal cases, with an average resolution period of 29 months. Similarly, 22 of the 84 BAPAs signed during the year were renewals, with an average resolution period of 23.5 months. The strong proportion of renewals reflects taxpayers’ continued confidence in the programme.
The report also highlights reforms introduced under the Income-tax Act, 2025 and the Income-tax Rules, 2026. The APA provisions are now governed by section 168 of the Income-tax Act, 2025, read with rules 103 to 120 of the Income-tax Rules, 2026.
The reforms include a simplified legal framework, revised APA forms, a uniform application fee of ₹20 lakh, clearer provisions for modified returns and annual compliance, and specific timelines for processing certain Unilateral APA applications relating primarily to information-technology services.
The new forms prescribed for the APA process include Form 50 for pre-filing consultation, Form 51 for APA and rollback applications, Form 52 for annual compliance and adjustment reporting, and Form 54 for renewal applications. The revised forms are intended to reduce documentation requirements, promote standardisation and improve ease of compliance.
The CBDT has also revised the model APA agreement to provide clarity for cases covering tax years governed partly by the Income-tax Act, 1961 and partly by the Income-tax Act, 2025. The revised template contains appropriate references relating to modified returns, compliance audits, secondary adjustments, revision and cancellation of APAs.
The Annual Report further explains the interaction between APAs and the revised Safe Harbour regime. A critical assumption has been introduced to allow eligible taxpayers to opt for Safe Harbour for future years, notwithstanding an existing APA, by excluding the relevant transactions from the APA through an appropriate revision.
The revised Safe Harbour framework increases the turnover threshold for eligible IT-service transactions from ₹300 crore to ₹2,000 crore and prescribes a common profit margin of 15.5 per cent for covered IT services. Together, the APA and Safe Harbour mechanisms provide taxpayers with broader options for obtaining advance tax certainty.
The CBDT has emphasised that early filing of APA applications, particularly renewal applications, can facilitate resolution before or during the initial years covered by an APA. Continued engagement with taxpayers, tax advisers and treaty partners will remain central to improving processing times and providing uninterrupted tax certainty.
The Annual APA Report underlines the Government’s commitment to promoting a predictable, non-adversarial and investor-friendly tax regime. The continued growth of the programme demonstrates the value of cooperation, transparency and mutual trust between taxpayers and the tax administration in resolving complex cross-border transfer-pricing matters.
The Annual Report can be accessed at: https://www.incometaxindia.gov.in/documents/d/guest/apa-report2025-26-2-pdf
