The Central Board of Direct Taxes (CBDT) released a draft notification on 19 June for comments and suggestions in relation to amending rule 10CB, which prescribes the timelines for secondary adjustments. In order to align primary adjustment in respect to transfer pricing with the actual allocation of funds, section 92CE was introduced in the Income Tax Act, 1961, with effect from 1 April 2018 to provide for secondary adjustment by attributing income to the excess money lying in the hands of the associated enterprise (AE).
Section 92CE empowered the CBDT to prescribe the time limit within which the excess money lying in the hands of the AE as a result of primary adjustment shall be repatriated to India. Accordingly, rule 10CB was introduced in the Income Tax Rules, 1962, which provides a uniform period of 90 days starting from different times depending on the nature of primary adjustment (the starting point) for the repatriation of excess money.
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