Specified Domestic Transaction: Section 92BA and Section 164

A specified domestic transaction is a prescribed category of domestic transaction that is subject to transfer-pricing rules when the statutory conditions and the aggregate monetary threshold are satisfied.

Updated: 28 September 2026

At a glance: Section 92BA of the Income-tax Act, 1961 was the provision defining a specified domestic transaction. Under the Income-tax Act, 2025, the corresponding provision is Section 164. The aggregate threshold continues to be more than Rs. 20 crore in the relevant tax year. A transaction must also fall within one of the categories specified by the law and must not be an international transaction.

Current-law note: This URL historically explains Section 92BA of the Income-tax Act, 1961. For tax years governed by the Income-tax Act, 2025, readers should refer to Section 164 and the corresponding provisions of the 2025 Act. The legacy Section 92BA material is retained below because it remains useful for earlier years, pending matters and cross-reference purposes.

Meaning of specified domestic transaction under Section 164

Section 164 of the Income-tax Act, 2025 defines a specified domestic transaction for the purposes of the transfer-pricing chapter. In practical terms, the provision applies where a domestic transaction is not an international transaction, falls within one of the listed statutory categories, and the aggregate value of the covered transactions entered into by the assessee during the tax year exceeds Rs. 20 crore.

Transactions covered by Section 164 include:

a transaction referred to in Section 122;
a transfer of goods or services referred to in Section 140(9);
business transacted between the assessee and another person as referred to in Section 140(13);
specified transactions under Chapter VIII to which Section 140(9) or Section 140(13), or the relevant legacy provisions of Section 80-IA(8) or Section 80-IA(10) of the Income-tax Act, 1961, apply;
business transacted between persons referred to in Section 205(4); and
any other transaction that may be prescribed.

Rs. 20 crore threshold

The monetary test is applied to the aggregate of transactions covered by the definition. The aggregate must exceed Rs. 20 crore in the tax year. Accordingly, a transaction does not become a specified domestic transaction merely because it is domestic or between connected persons; it must fall within a statutory category and the aggregate threshold must also be crossed.

Why the definition matters

Once a transaction qualifies as a specified domestic transaction, the transfer-pricing framework becomes relevant. The arm's length price is determined under the applicable transfer-pricing provisions, and the assessee may have documentation and accountant-report obligations. The purpose is to ensure that profits affected by covered domestic arrangements are determined on an arm's length basis where the statute requires it.

Arm's length price

Under the current Act, Section 165 provides the methods for determining the arm's length price of an international transaction or specified domestic transaction. These include the comparable uncontrolled price method, resale price method, cost plus method, profit split method, transactional net margin method and such other prescribed method as may apply.

Documentation and accountant report

Persons entering into covered transactions should examine the record-keeping and reporting provisions applicable to the relevant tax year. Under the current statutory structure, the provisions corresponding to old Sections 92D and 92E are Sections 171 and 172 of the Income-tax Act, 2025. The Income Tax Department's 2026 forms guidance identifies Form No. 48 as the report from an accountant under Section 172 for international transactions and specified domestic transactions, corresponding to old Form 3CEB under Section 92E.

Practical point: Classification should be checked before the reporting deadline. The nature of the transaction, the provision under which a deduction or concessional regime is claimed, the relationship between the parties, the aggregate value of covered transactions and the applicable tax year can all affect the analysis.

Legacy Section 92BA of the Income-tax Act, 1961

For periods governed by the Income-tax Act, 1961, Section 92BA defined specified domestic transaction by reference to specified categories of transactions that were not international transactions. The provision applied where the aggregate of covered transactions entered into during the previous year exceeded Rs. 20 crore.

The principal categories appearing in the later version of Section 92BA were:

transactions referred to in Section 80A;
transfers of goods or services referred to in Section 80-IA(8);
business transacted between the assessee and another person as referred to in Section 80-IA(10);
transactions under other provisions of Chapter VI-A or Section 10AA to which Section 80-IA(8) or Section 80-IA(10) applied;
business transacted between persons referred to in Section 115BAB(6);
business transacted between the assessee and another person as referred to in Section 115BAE(4); and
any other prescribed transaction.

The Section 115BAE(4) category was inserted into Section 92BA as clause (vb) with effect from 1 April 2024. Older versions of this page that stop at clause (va) are therefore incomplete for the later operation of the 1961 Act.

Old and current section references

Subject	Income-tax Act, 1961	Income-tax Act, 2025
Specified domestic transaction	Section 92BA	Section 164
Arm's length price	Section 92C	Section 165
Reference to Transfer Pricing Officer	Section 92CA	Section 166
Information and documents	Section 92D	Section 171
Accountant report	Section 92E	Section 172
Relevant definitions	Section 92F	Section 173

Related provisions

For background on the transfer-pricing framework, see the site's pages on associated enterprise under Section 92A, international transaction under Section 92B, computation of arm's length price under Section 92C, reference to the Transfer Pricing Officer under Section 92CA, and transfer-pricing documentation under Section 92D.

Frequently asked questions

Is every domestic related-party transaction an SDT?

No. The transaction must fall within the statutory definition and the aggregate value of the covered transactions must exceed the prescribed threshold.

What is the threshold for specified domestic transactions?

The aggregate of transactions covered by the definition must exceed Rs. 20 crore in the relevant tax year.

Is an international transaction also a specified domestic transaction?

No. The statutory definition expressly deals with covered transactions that are not international transactions.

What replaced Section 92BA?

Under the Income-tax Act, 2025, the corresponding provision is Section 164, titled "Meaning of specified domestic transaction."

Does an SDT require transfer-pricing compliance?

Where the statutory definition applies, the relevant arm's length pricing, documentation and accountant-report provisions should be examined for the tax year concerned.

Note: This article is a general legal and tax information resource. For a transaction-specific conclusion, the governing tax year, statutory provision, rules, notifications and facts should be checked together.