The Institute of Chartered Accountants of India (ICAI), through its International Taxation Committee, has released the 10th Edition (Revised 2026) of the “Guidance Note on Report under Section 92E of the Income-tax Act, 1961 (Transfer Pricing)”. The latest edition, published in September 2026, is a comprehensive professional reference for Chartered Accountants dealing with transfer pricing compliance and reporting in Form No. 3CEB.
The revised Guidance Note assumes significance as the reporting requirement under Section 92E read with Rule 10E of the Income-tax Rules, 1962 requires a person entering into an international transaction or specified domestic transaction during the previous year to obtain an accountant’s report and furnish the same in Form No. 3CEB. ICAI has emphasised that such reporting entails substantial professional responsibility and requires a comprehensive understanding of the statutory provisions, rules and reporting requirements coupled with appropriate professional judgement.
Major overhaul after nearly four years
The 10th Edition has been comprehensively reviewed and updated after a gap of nearly four years. According to ICAI, the revision incorporates significant developments during the intervening period, including relevant legislative amendments, notifications, circulars, judicial pronouncements and other developments concerning Section 92E reporting and transfer pricing.
A key highlight of the revised edition is that it traces the evolution of India’s transfer pricing framework from its introduction in 2001 up to the amendments made by the Finance Act, 2026, including the recent block assessment mechanism. It consequently brings the professional guidance in line with the latest developments applicable under the Income-tax Act, 1961.
Important applicability clarification — Guidance Note does not cover Income-tax Act, 2025
Importantly, ICAI has expressly clarified the statutory scope of the revised publication. The Guidance Note is based on the provisions of the Income-tax Act, 1961 applicable up to Assessment Year 2026-27, including assessments and appeals relating to such years that may take place subsequently. It does not address the transfer pricing provisions of the Income-tax Act, 2025.
This distinction is particularly relevant for professionals while determining which statutory framework and corresponding guidance applies to a particular assessment or proceeding.
Nine-chapter comprehensive framework for Transfer Pricing & Form 3CEB
The revised Guidance Note has been structured into nine detailed chapters, backed by extensive annexures containing statutory provisions, rules and forms, extracts from memoranda explaining Finance Bills, relevant circulars, portions of the ICAI Code of Ethics and illustrative engagement and management representation letters.
The initial chapters deal with the responsibilities of the enterprise and the accountant, the concept of Associated Enterprises, identification and reporting of international transactions and specified domestic transactions, and application of the arm’s length principle. This framework is intended to help professionals identify the transactions falling within transfer pricing provisions and discharge the corresponding reporting obligations in Form No. 3CEB.
Detailed guidance on computation of Arm’s Length Price
A significant portion of the publication has been devoted to computation of the Arm’s Length Price (ALP). Chapter 6 explains each prescribed transfer pricing method with worked illustrations and provides guidance on the selection of the tested party, determination of the most appropriate method, use of multiple-year data, application of the arm’s length range and tolerance band, and making appropriate comparability adjustments.
The updated guidance is particularly relevant in the backdrop of increasingly complex cross-border structures and transactions between Associated Enterprises, where selection of comparables and appropriate transfer pricing methodology frequently assumes critical importance.
Greater focus on contemporaneous documentation and verification
Chapter 7 deals extensively with transfer pricing documentation and its verification. The revised Guidance Note explains the categories of information required to be maintained, relief available to smaller taxpayers, requirements relating to contemporaneous and adequately supported documentation, the applicable retention period and the inquiries that an accountant should undertake before relying upon an analysis prepared for an earlier year.
The emphasis on documentation reinforces the principle that transfer pricing positions should be supported not merely by calculations but also by adequate factual, functional and economic evidence contemporaneously maintained by the taxpayer.
ICAI highlights serious penalty consequences for non-reporting
The 10th Edition also gives considerable importance to the penalty framework. Chapter 8 specifically draws attention to the distinction between a transaction that has been reported, documented and disclosed and a transaction that has not been reported at all, the latter potentially attracting the higher consequences applicable to misreporting.
The revised Guidance Note therefore underscores the importance of proper identification and complete reporting of reportable transactions rather than treating Form No. 3CEB as a merely procedural compliance document.
Form 3CEB examination is not an audit of financial statements
In an important professional clarification, Chapter 9 explains the scope of examination by the accountant under Section 92E. ICAI clarifies that the engagement for issuance of Form No. 3CEB is not an audit of the financial statements. Instead, the accountant’s examination is focused on the accounts, records and documentation relevant to international transactions and specified domestic transactions and on verifying the prescribed particulars required to be reported.
The Guidance Note addresses the extent of examination expected from the accountant, use of materiality and test checks, reliance on audited financial statements and the work of other auditors, and reporting of transactions covered by an Advance Pricing Agreement (APA). It further provides guidance regarding responsibility paragraphs and qualifications in the online form, situations in which a report may be revised and clause-by-clause reporting requirements in the Annexure to Form No. 3CEB.
Global developments including BEPS and Two-Pillar Solution recognised
The revised publication also places Indian transfer pricing compliance within the changing international tax environment. ICAI notes the influence of the OECD/G20 Base Erosion and Profit Shifting (BEPS) Project, the Inclusive Framework on BEPS and the increasing international focus on aligning taxation with economic substance and value creation. It also recognises developments surrounding the Two-Pillar Solution and global minimum taxation, along with challenges arising from rapid digitalisation and evolving business models.
Professional judgement remains central to Transfer Pricing reporting
While providing extensive practical guidance, ICAI has emphasised that complex transactions, interpretation issues and reporting considerations may ultimately depend upon the specific facts and circumstances of each engagement, requiring Chartered Accountants to exercise appropriate professional judgement. The revised edition is aimed at bringing greater clarity, consistency and quality to reporting under Section 92E and preparation of Form No. 3CEB.
The Guidance Note can be accessed at: https://a2ztaxcorp.net/wp-content/uploads/2026/10/1790230417_pdf_GUIDANCE-NOTE-10th-edition-final.pdf
