For tax year 2026-27, a prescribed method eligible for the arm’s-length range is the most appropriate method. What is the minimum number of dataset entries required for the range rule under the…
Question and options
For tax year 2026-27, a prescribed method eligible for the arm’s-length range is the most appropriate method. What is the minimum number of dataset entries required for the range rule under the Income-tax Rules, 2026?
Four
Six
Three
Ten
Answer and explanation
Correct answer: B - Six
Rule 81(6) of the Income-tax Rules, 2026 applies the arm's length range, from the 35th to the 65th percentile, only where the most appropriate method is one of the four listed methods and the dataset has six or more entries. With fewer entries, rule 81(7) uses the arithmetic mean instead.
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