A S BANKA ADVISORS

The Income-tax Act 2025 replaced the Income-tax Act 1961 on April 1, 2026. For founders and finance leaders running cross-border transactions, the practical question this filing season is simple: when you file Form 3CEB in October 2026, which Act governs it? The answer is the 1961 Act, and the entire reason sits inside one sentence of the new law.

The transition test is the transaction date, not the assessment year

Section 536, sub-clause 5 of the Income-tax Act 2025 preserves the whole of Chapter X, the transfer pricing framework in Sections 92 to 92F read with Rules 10A to 10THD, for any international transaction or specified domestic transaction undertaken on or before March 31, 2026. The decisive word is “undertaken”. The cutover turns on the transaction date, not the assessment year, not the date you file your return, and not the date an assessment order is passed.

For a typical Indian multinational filing Form 3CEB for AY 2026-27, every reported transaction occurred during FY 2025-26. By definition each one was undertaken on or before March 31, 2026. So the full 1961 Act framework applies, and the CBDT transition FAQ confirms no new Form 3CEB has been notified for AY 2026-27. You file the existing form under Rule 10E.

The calendar is tighter than the headline date suggests

The October 31 deadline does not stand alone. It sits behind the September 30 tax audit and ahead of two more filings, and the dependencies run in one direction. Plan around the full stack:

• Form 3CD (tax audit), September 30, 2026: Clause 31 related-party disclosures must reconcile with Form 3CEB. Section 271B penalty is 0.5% of turnover, capped at Rs 1,50,000.
• Form 3CEB and the income-tax return, October 31, 2026: filed under Section 92E and Section 139(1). Non-filing of Form 3CEB attracts a flat Rs 1,00,000 under Section 271BA.
• Form 3CEAB (master file constituent-entity notification), October 31, 2026.
• Form 3CEAA (master file), November 30, 2026.
• Form 3CEAC (CbCR notification), January 31, 2027, and Form 3CEAD (country-by-country report), March 31, 2027.

What stays exactly the same for your FY 2025-26 file

If you were hoping the 2025 Act would simplify your benchmarking, it does not, at least not for this year. The substance is preserved intact:

• The five prescribed ALP methods under Section 92C, CUP, RPM, Cost Plus, Profit Split, and TNMM, plus the Other Method under Rule 10AB.
• The plus or minus 3% tolerance band (1% for wholesale traders) and the interquartile range under Rule 10CA(4).
• Safe harbour under Section 92CB with the Notification 22/2025 margins, elected on Form 3CEFA with Form 3CEB.
• Advance Pricing Agreements under Section 92CC. APAs already in force span the cutover unchanged: the agreed method, margins, and critical assumptions continue, and rollback under Rule 10MA still applies.
• Master file and CbCR thresholds: Rs 500 crore consolidated group revenue for the master file and roughly Rs 6,400 crore for CbCR, both tested on the immediately preceding year.

Penalty exposure has not moved either

Every penalty that mattered last year still bites. Non-maintenance of documentation under Section 271AA(1) is 2% of each transaction value. A missing master file under Section 271AA(2) is Rs 5,00,000. Information not furnished during a transfer pricing proceeding under Section 271G is another 2%. CbCR defaults under Section 271GB run from Rs 5,000 to Rs 50,000 per day. A transfer pricing adjustment that becomes under-reported income draws Section 270A at 50%, or 200% for misreporting. The Section 273B reasonable-cause defence and Section 270AA immunity both remain available, which is exactly why contemporaneous documentation matters.

The advisory view: sequence the work, do not wait for October

The mistake we see most often is treating Form 3CEB as an October job. It is not. By the time the tax audit closes on September 30, your benchmarking, functional analysis, and arm’s length determination should already be signed off, because Form 3CD Clause 31 has to agree with Form 3CEB. Lock your international transaction inventory by mid-July, refresh the FAR and DEMPE analysis through early August, update the comparables study and compute the range by mid-August, and finalise the arm’s length price by the end of the month. That leaves September for the tax audit and October for a clean filing rather than a scramble.

This is also the year to revisit edge cases: captive IT subsidiaries weighing a safe harbour election, distributors carrying marketing-intangible (AMP) risk, intra-group loans and guarantees that must be benchmarked, and SEZ groups with specified domestic transactions above Rs 20 crore. Each of these sits squarely inside the 1961 Act framework for FY 2025-26, so the position you take now is the position you defend later.

Download the full carousel PDF for the complete FY 2025-26 filing calendar, the section-by-section preservation map from the 1961 Act to the 2025 Act successors, and the 8-step practitioner sprint before October 31.

Need help navigating the cutover?

The transfer pricing transition sits at the intersection of three time pressures: the September 30 tax audit, the October 31 Form 3CEB deadline, and the Income-tax Act 2025 narrative. If you want a second set of eyes on your FY 2025-26 approach, your safe-harbour election, or your APA continuity, talk to an expert. Book a call: https://calendly.com/asbanka-info/30min

CA Adityavikram Banka, Founder, A S Banka Advisors Private Limited.