Section 171 Income Tax Act 2025: What Transfer Pricing Records Must Be Maintained?

Section 171 requires persons undertaking international transactions or specified domestic transactions, and constituent entities of international groups, to maintain prescribed information and documents. It also regulates production of documents when called for by tax authorities.

Current law: Income-tax Act, 2025, effective from 1 April 2026. Section 171 corresponds broadly to section 92D of the Income-tax Act, 1961. The detailed content, manner, retention period and filing requirements depend on applicable prescribed rules.
On this page

Who is covered by Section 171?

Under section 171(1), the obligation applies to two categories: (a) every person who has entered into an international transaction or specified domestic transaction; and (b) every person who is a constituent entity of an international group. The information and documents must be maintained for the period and in the manner prescribed by the applicable rules.

Section 171 explained: sub-section by sub-section

Section 171(1): Maintenance and keeping of documents

Covered persons must keep and maintain prescribed records relevant to their transactions or group status. This is a statutory recordkeeping obligation, not merely an obligation arising after a tax notice.

Section 171(2): Furnishing documents on notice

During proceedings under the Act, the Assessing Officer or Commissioner (Appeals) may require a person covered by section 171(1)(a) to furnish prescribed information or documents within ten days of receiving the notice.

Section 171(3): Extension of time

On an application by the person concerned, the Assessing Officer or Commissioner (Appeals) may extend the initial ten-day period by a further period not exceeding thirty days. An extension is discretionary and should be requested promptly with reasons.

Section 171(4): Constituent entity reporting

A constituent entity covered by section 171(1)(b) must furnish the prescribed information and documents to the authority prescribed under section 511(1), in the prescribed manner and by the prescribed date. This requirement is distinct from the ten-day notice mechanism under section 171(2).

Section 171(5): Defined terms

For this section, the meanings of constituent entity and international group are expressly incorporated from sections 511(10)(d) and 511(10)(g), respectively.

What transfer pricing documents should be maintained?

The precise mandatory documentation is determined by the applicable Income-tax Rules, 2026. Depending on the transaction and reporting category, relevant records may include:

  • Ownership and group structure, including associated enterprises.
  • Nature, value and terms of international or specified domestic transactions.
  • Intercompany agreements, invoices and accounting records.
  • Functional analysis of functions performed, assets employed and risks assumed.
  • Economic analysis, comparable transactions and the basis for selecting the most appropriate arm's length pricing method.
  • Supporting calculations, adjustments and contemporaneous evidence.
  • Prescribed international group or master-file information, where applicable.
Important: This is an illustrative compliance checklist, not a substitute for the precise documentation and thresholds in the applicable rules. Do not assume every item is mandatory for every taxpayer.

Relevant statutory definitions and linked provisions

International transaction: Defined under section 163, including qualifying transactions between associated enterprises where the statutory non-resident condition is met.
Associated enterprise: The relationship is governed by section 162.
Specified domestic transaction: Governed by section 164 of the Income-tax Act, 2025.
Constituent entity: Has the meaning assigned by section 511(10)(d), including entities identified under the statutory international group reporting framework.
International group: Has the meaning assigned by section 511(10)(g); section 171 does not create an independent definition.
Arm's length price: Defined in section 173(a); methods for determining it are governed by section 165.

Practical illustration

An Indian company pays a foreign associated enterprise for technical services. It maintains the agreement, invoices, functional analysis, benchmarking and pricing calculations in accordance with the applicable rules. During an assessment, the Assessing Officer issues a notice under section 171(2). The company must furnish the requested documents within ten days of receipt, unless the officer grants an extension on application under section 171(3), for no more than thirty additional days.

How Section 171 relates to other provisions

Section 166 governs references to the Transfer Pricing Officer; section 172 governs the accountant's report; section 173 contains relevant definitions; and section 511 governs reporting in respect of international groups. Non-compliance may also attract applicable penalty provisions, including sections 442 and 457, subject to their statutory conditions.

Frequently asked questions

Is transfer pricing documentation required even without an assessment notice?

Yes. Section 171(1) independently requires covered persons to keep and maintain prescribed documents.

How much time is allowed to furnish records after a notice?

Section 171(2) allows ten days from receipt of the notice. Under section 171(3), an officer may grant up to thirty additional days on application.

Does the ten-day period apply to international group reporting?

Not automatically. Section 171(4) provides a separate prescribed filing mechanism for constituent entities of international groups.

Which earlier provision corresponds to Section 171?

It broadly corresponds to section 92D of the Income-tax Act, 1961. The numbering is different: section 171 of the 1961 Act deals with HUF partition, not transfer pricing documentation.

Official statutory sources

Official Section 171 textIncome-tax Act 2025 (amended)Act and Rules 2026

Updated: 10 November 2026. This article is for general legal information; verify applicable rules, notifications and facts before filing or responding to a notice.