Under section 168(1) of the Income-tax Act, 2025, who may enter into an advance pricing agreement with a person?
Question and options
Under section 168(1) of the Income-tax Act, 2025, who may enter into an advance pricing agreement with a person?
The Transfer Pricing Officer, with the Commissioner's approval
The Assessing Officer, with the Board's approval
The Central Government, on the Board's recommendation
The Board, with the Central Government's approval
Answer and explanation
Section 168(1) of the Income-tax Act, 2025 empowers the Central Board of Direct Taxes, with the approval of the Central Government, to enter into an advance pricing agreement fixing the arm's length price or the method for determining it. The Central Government approves but is not the party, and the Assessing and Transfer Pricing Officers have no power to make such agreements.
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