Form explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Form No. 46 is the option an assessee exercises so that an arm's length price determined for one tax year also applies to two later years. Form No. 47 is the accountant's certificate that must go with it. This guide explains both as printed in the Income-tax Rules, 2026 (G.S.R. 198(E), notified on 20 March 2026), read with the amending notifications issued up to 22 September 2026.
Under rule 82, the option is exercised by furnishing Form No. 46 for the two consecutive tax years that follow the tax year for which the reference was made, within the period "beginning from the end of the third tax year and ending on the 30th June succeeding the third tax year". Every Form No. 46 must carry the accountant's certificate in Form No. 47. The Transfer Pricing Officer then declares in writing, within one month from the end of the month in which the option is exercised, whether it is valid or invalid.
The section behind the forms
Section 166 of the Income-tax Act, 2025 lets the Assessing Officer, with previous approval, refer the determination of the arm's length price of an international transaction or specified domestic transaction to the Transfer Pricing Officer. Sub-section (9) then says the arm's length price determined for one tax year applies to similar transactions in the two consecutive tax years that follow, if the assessee exercises an option for those years in the prescribed form, manner and period and the Transfer Pricing Officer declares the option valid by a written order within one month from the end of the month in which it is exercised. Under sub-section (10), sub-section (9) does not apply to proceedings under Chapter XVI-B. Read the full section in section 166 on reference to the Transfer Pricing Officer.
What rule 82 adds
Rule 82 is discussed in the post on rule 82; the points that matter for the forms are these.
- Which years. Form No. 46 is furnished for two consecutive tax years, the second and the third, immediately following the first tax year for which the reference was made (sub-rule (1)).
- When. For international transactions or specified domestic transactions, within the period beginning from the end of the third tax year and ending on the 30th June succeeding the third tax year (sub-rule (2)).
- Certificate. Every Form No. 46 is accompanied by a certificate from an accountant as defined in section 515(3)(b), in Form No. 47 (sub-rule (3)).
- Order. Where the conditions in sub-rule (5) are fulfilled, the Transfer Pricing Officer passes a written order within one month from the end of the month in which the option is exercised, declaring it valid or invalid (sub-rule (4)).
- Objections. If the option is declared invalid, the assessee may file objections with the Commissioner to whom the Transfer Pricing Officer is subordinate within fifteen days of receiving the order; the Commissioner hears the assessee and passes orders (sub-rules (6) and (7)).
- Cancellation. The order is cancelled if the information in Form No. 46 is found inaccurate or not bona fide, or the conditions are not met, after a reasonable opportunity of being heard and with the Commissioner's approval (sub-rules (8) and (9)). If the option is invalid or the order is cancelled, the Transfer Pricing Officer proceeds to determine the arm's length price for the first tax year (sub-rule (10)).
The conditions of sub-rule (5) are: the transactions in the second and third years are similar to those of the first year; there is no change in the method, the functions performed with assets employed and risks assumed remain materially consistent, the business activities and accounting methods remain materially the same, and there is no change in the contractual terms; the section 172 report and the return of income have been furnished for the first and second years, and the assessee undertakes to furnish them for the third year; the case is not covered by Chapter XVI-B; and no associated enterprise is resident in a jurisdiction notified under section 176. A change in the business result or holding structure of the associated enterprise does not stop the option, provided there is no material change in the transaction and its functions.
If your group is planning its transfer pricing position across years, our tax planning advisory team can help you test whether the conditions are likely to be met before the option is filed.
Form No. 46: the option
| Part | Rows | What it asks |
|---|---|---|
| A: Particulars of the Person | 1 to 5 | Name, address, Permanent Account Number, email ID, contact number |
| B: Other Information | 6 | The tax year for which the Assessing Officer made the reference under section 166(1) |
| B | 7 | The return of income and Form No. 48 for the first tax year and the second tax year: date of furnishing and acknowledgement number of each |
| B | 8 | The transactions for which the arm's length price is to be determined: name of the associated enterprise, its taxpayer identification number (or equivalent in its country or region), address, nature of transaction, and for each of the three years the total amount paid, received, payable or receivable as per books of account and as per the arm's length price determined, and the method used |
The certification states that the assessee agrees to the determination of the arm's length price under section 166(9) for the three tax years (pre-filled). The assessee also certifies that for the three years there has been no material change in the analysis of functions, assets and risks, no material change in the business result or holding structure of the associated enterprise or change in the associated enterprise that affects the transactions, no associated enterprise resident in a jurisdiction notified under section 176, and no change in contractual terms. The assessee declares that it will furnish the return of income and Form No. 48 for the third tax year by the due dates in section 263(1) and section 172 respectively. A closing declaration says the signatory has examined the information and accompanying documents and the facts are true, comprehensive and accurate as far as the signatory knows and believes. The Notes cover the form of name and address, the mention of a specified territory, pre-filled information and the rupee unit. The second-year and third-year return dates are in section 263; the form quotes them only by section.
Form No. 47: the accountant's certificate
Part A repeats the particulars of the person. The certification states that the accountant has examined the books of account, the documents maintained under section 171 and other relevant documents of the assessee for the first, second and third tax years, for giving consent for determination of the arm's length price under section 166(9). The accountant then certifies seven points:
| Point certified |
|---|
| The case for the three years is not covered by Chapter XVI-B |
| The transactions of the first year are similar to those of the second and third years under rule 82 |
| No material change in functions performed, assets employed and risks assumed |
| No material change in the business result or holding structure of the associated enterprise, or change in the associated enterprise, affecting the transactions or functions |
| No associated enterprise relevant to the option is resident in a jurisdiction notified under section 176 |
| No change in the contractual terms that lay down how responsibilities, risks and benefits are divided |
| The information given in Form No. 46 for the three years is accurate and bona fide |
A space is left for any other relevant information. The accountant signs with designation, membership number, UDIN if any, firm name and firm registration number.
An example
Halden Instruments India Private Limited had a reference made for a first tax year. Its Transfer Pricing Officer determined the arm's length price of its purchases from its parent. The company wants the same price to apply to the next two tax years. Within the period that ends on the 30th June after the third year, it files Form No. 46, with the return and Form No. 48 details of the first two years, and its accountant files Form No. 47. If the Transfer Pricing Officer declares the option invalid, Halden has fifteen days from receipt to file objections with the Commissioner.
Need help with a multi-year transfer pricing option?
The option has strict conditions and a closed window, and an error in the three-year particulars can lead to cancellation. Our tax planning advisory team can help you review the transactions, the certificates and the dates before you file.
Key takeaways
- Form No. 46 is the option under section 166(9) and rule 82 to carry an arm's length price to the next two tax years.
- It is furnished in the window from the end of the third tax year to the 30th June after it, with an accountant's Form No. 47.
- The Transfer Pricing Officer declares the option valid or invalid within one month from the end of the month of exercise.
- Objections to an invalid declaration go to the Commissioner within fifteen days.
- An inaccurate form or unmet conditions can lead to cancellation of the order.
Read next
- Rule 82: multi-year arm's length price and Form No. 46
- Form Nos. 52 and 54: annual compliance report and renewal of an Advance Pricing Agreement
- Form No. 48: accountant's report on international and specified domestic transactions
- Form Nos. 50 and 51: pre-filing consultation and Advance Pricing Agreement application
Disclaimer: Based on the Income-tax Rules, 2026 (G.S.R. 198(E), notified on 20 March 2026), read with the amending notifications issued up to 22 September 2026, as consulted on 4 October 2026. It explains the words of the forms and rules only; later notifications, the forms and utilities on the e-filing portal, circulars and the way the tax authorities apply these provisions should be checked. This article is general information, not legal advice; check the official text before acting.