ICAI Opens Section 92E Transfer-Pricing Guidance Note Draft for Comments Until September 5

The Institute of Chartered Accountants of India (ICAI) has released a fresh Exposure Draft of its Guidance Note on Report under Section 92E of the Income-tax Act, 1961 and invited public comments up to September 5, 2026. The revision is directly relevant to chartered accountants handling transfer-pricing reporting, international transactions and specified domestic transactions.

ICAI's International Taxation Committee issued the consultation on August 21, 2026. The Committee said the existing Ninth Edition of the Guidance Note was issued in October 2022 and is now proposed to be revised to keep the publication updated and relevant for members.

A substantially expanded technical draft

The exposure draft runs to more than 600 pages and is structured around the full lifecycle of Section 92E reporting. Its chapters cover the responsibilities of the enterprise and accountant, associated enterprises, international transactions, specified domestic transactions, arm's length price, methods for computing arm's length price, documentation and verification, penalties and the scope of examination under Section 92E.

A notable addition is a dedicated comparative chapter covering the Income-tax Act, 1961 and the Income-tax Act, 2025. The draft itself explains that the Guidance Note is based on the 1961 Act, which remains relevant through assessment year 2026-27 and for later proceedings connected with those years, while the Income-tax Act, 2025 is effective from April 1, 2026 for tax year 2026-27 onwards.

The draft also contains extensive annexures covering statutory provisions, relevant rules and forms, extracts from Finance Bill memoranda, CBDT circulars, relevant Code of Ethics material, recommended fee-scale material, SA 610 (Revised), sample engagement and management representation letters, and useful websites.

Recent transfer-pricing changes reflected in the draft

The exposure draft incorporates recent legislative developments that materially affect transfer-pricing practice. It notes the Finance Act, 2025 changes enabling a block transfer-pricing approach under Section 92CA. Under the mechanism described in the draft, an arm's length price determined by the Transfer Pricing Officer for a base year may, subject to the prescribed option and conditions, apply to similar transactions for the next two consecutive previous years without a fresh reference for those years.

The draft says the taxpayer must exercise the option in the prescribed form and within the prescribed time, and that the TPO is required to declare the option valid or invalid within one month from the end of the month in which the option is exercised. ICAI describes the measure as intended to reduce repetitive arm's length price determinations and administrative burden.

It also reflects the Finance Act, 2026 insertion of Section 92CA(3AA), with retrospective effect from June 1, 2007, dealing with computation of the 60-day period available to the TPO before expiry of the assessment limitation period. The draft records specific cut-offs where the assessment limitation ends on March 31 and explains that the amendment addresses the controversy over inclusion or exclusion of the terminal date when computing that period.

What ICAI wants in consultation responses

ICAI has invited comments on any aspect of the Exposure Draft. It says useful responses should identify the specific paragraph or group of paragraphs concerned, provide a coherent rationale and contain a clear suggested change. Contributors may also propose supplementation of a paragraph with relevant Supreme Court case law or an applicable circular or notification.

Comments must be submitted through the official response link by September 5, 2026.

Why CAs should review the draft now

Section 92E work sits at the intersection of tax law, documentation, professional judgement and reporting responsibility. The draft's stated objective is not merely to restate the statute: it is intended to help accountants understand the respective responsibilities of the taxpayer and accountant, determine the nature and scope of information to obtain, apply appropriate verification procedures and assess when a disclosure, qualification or disclaimer may be necessary in the report.

For firms with active transfer-pricing practices, the consultation period offers a practical chance to test the proposed guidance against current engagements. Teams should focus on areas where the draft may create ambiguity in documentation expectations, verification procedures, treatment of new legislative provisions or reporting language.

- Map frequently encountered Section 92E issues to the relevant draft paragraph.

- Check whether recent Finance Act changes and procedural developments are adequately reflected.

- Flag guidance that may be difficult to apply consistently in practice.

- Support proposed changes with case law, CBDT material or a clear technical rationale.

- Submit focused comments by September 5 rather than broad, unsupported observations.

Practical takeaway: transfer-pricing practitioners should treat the exposure draft as an active consultation, not merely a new reference document. The strongest submissions will identify a specific paragraph, explain the practical problem and propose precise replacement or supplementary guidance before the September 5 deadline.

Official source: View the official source document

Key takeaway

Fresh ICAI technical consultation with a near-term September 5 deadline and direct implications for CAs conducting Section 92E engagements.