Which transfer pricing method allocates the combined profits from a controlled transaction among the associated enterprises according to their relative contributions?

The profit split method, one of the methods in section 165(1) of the Income-tax Act, 2025, determines the combined profit from the controlled transactions and splits it among the associated enterprises according to their relative contributions. The cost plus and resale price methods test one party's mark-up or margin, and the comparable uncontrolled price method compares prices.