What is the maximum forward validity of an advance pricing agreement under section 168(4), excluding any rollback years?
Question and options
What is the maximum forward validity of an advance pricing agreement under section 168(4), excluding any rollback years?
Two consecutive tax years
Three consecutive tax years
Ten consecutive tax years
Five consecutive tax years
Answer and explanation
Correct answer: D - Five consecutive tax years
Section 168(4) of the Income-tax Act, 2025 makes an advance pricing agreement valid for the period it specifies, not exceeding five consecutive tax years. The agreement may separately be rolled back to up to four preceding tax years, which does not extend its forward period.
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