Accordingly, taxpayers filing their accountant report for FY 2025–26 will continue to furnish Form 3CEB. Form 48 is effectively applicable from FY 2026–27. Although businesses have one transition year before Form 48 becomes applicable, they should utilise this period to assess their transfer pricing documentation and reporting processes, as the new form requires significantly more detailed disclosures than its predecessor.

Why Was Form 48 Introduced?

The introduction of Form 48 is aimed at strengthening the quality and consistency of transfer pricing reporting.

While Form 3CEB primarily required the Chartered Accountant to certify the particulars of international transactions and specified domestic transactions, Form 48 adopts a more structured reporting approach by requiring taxpayers to disclose additional information supporting the arm’s length nature of such transactions.

The objective is to:

• improve the quality and consistency of transfer pricing reporting;
• facilitate automated validation and cross-verification of information across various tax filings;
• enable risk-based assessment through data analytics; and
• encourage taxpayers to maintain robust contemporaneous transfer pricing documentation.

The transition therefore reflects the Government’s objective of making transfer pricing reporting more transparent, consistent and evidence-based.

The Income Tax Department has published an official Guidance Note on Form No. 48 detailing the reporting requirements directly.

Form 48 – A More Comprehensive Reporting Framework

The most significant change under Form 48 is not merely the reporting format but the extent of information that taxpayers will be required to maintain and disclose.

Unlike Form 3CEB, Form 48 places greater emphasis on the economic analysis supporting transfer pricing positions. Consequently, taxpayers should ensure that robust transfer pricing documentation is available before the reporting process begins.

Some of the additional information expected to be reported under Form 48 includes:

• Arm’s length margin determined for the benchmarked transactions.
• Details of the benchmarking analysis supporting the arm’s length outcome.
• Selection and justification of the Most Appropriate Method (MAM).
• Functional, Asset and Risk (FAR) analysis.
• Comparable company search process and financial analysis.
• Transaction-wise reporting and reconciliation with statutory filings.
• Details of parent-company borne costs and intra-group allocations, wherever applicable.

Accordingly, businesses can no longer treat benchmarking as a year-end exercise. The benchmarking study should be completed upfront so that the arm’s length margin and supporting analyses are readily available while preparing Form 48.

Documentation Readiness – Why Businesses Should Start Preparing Now

Although Form 48 is applicable from FY 2026–27, businesses should begin preparing during the current financial year to avoid last-minute compliance challenges.

To ensure a smooth transition, businesses should maintain the following documentation:

• Updated Transfer Pricing Documentation (Local File).
• Benchmarking Report supporting the arm’s length nature of international transactions.
• Arm’s Length Margin computation.
• Functional, Asset and Risk (FAR) analysis.
• Comparable company search and benchmarking workings.
• Intercompany agreements and supporting commercial documentation.
• Segmental financial information, wherever applicable.
• Information relating to parent-company borne costs, employee stock option costs and shared service allocations, where relevant.
• Reconciliation of transfer pricing information with the financial statements, tax audit report and income-tax return.

Preparing these documents in advance will help businesses respond efficiently to the enhanced disclosure requirements under Form 48.

How SBC Can Support Your Transition

The transition from Form 3CEB to Form 48 is more than a change in the reporting format—it requires businesses to revisit their transfer pricing documentation and ensure that all supporting analyses are available before the reporting process commences.

As a dedicated Transfer Pricing Consultant for businesses navigating this transition, SBC brings the following support:

At SBC, our Transfer Pricing professionals assist businesses in preparing for Form 48 by providing:

• Form 48 readiness assessments;
• review of existing transfer pricing documentation;
• benchmarking studies and arm’s length margin analyses;
• FAR analysis and economic documentation;
• review of intercompany agreements;
• gap analysis of documentation against Form 48 reporting requirements; and
• end-to-end transfer pricing advisory, compliance and litigation support.

Our objective is to help businesses transition smoothly to the new reporting framework while ensuring that their transfer pricing documentation remains technically robust and audit-ready. For the complete regulatory breakdown — documentation requirements, benchmarking methods, and audit support — see our full guide: Transfer Pricing Services in India. Businesses managing GST and income tax compliance alongside transfer pricing can find related guidance through SBC’s GST Advisory Services.

For the complete regulatory breakdown — documentation requirements, benchmarking methods, and audit support — see our full guide: Transfer Pricing Services in India.

Key Takeaways

• Form 3CEB continues to apply for FY 2025–26.
• Form 48 effectively applicable from FY 2026–27  under Section 172 read with Rule 85 of the Income-tax Rules, 2026.
• Form 48 requires significantly more detailed disclosures, including benchmarking outcomes, arm’s length margins, FAR analyses and supporting economic analyses.
• Businesses should complete their benchmarking studies and maintain robust transfer pricing documentation well before the first Form 48 filing.
• Information from overseas Associated Enterprises, including parent-company borne costs and shared service allocations, should be obtained in advance to support the enhanced reporting requirements.
• Although the reporting framework has evolved, the arm’s length principle, recognised transfer pricing methods and documentation requirements continue under the new legislation.

Conclusion

The transition from Form 3CEB to Form 48 represents an important step in the evolution of India’s transfer pricing compliance framework. While Form 3CEB remains applicable for FY 2025–26, businesses should utilise this transition year to strengthen their transfer pricing documentation, complete benchmarking analyses, and establish robust internal processes to meet the enhanced reporting requirements under Form 48.

Early preparation will not only facilitate seamless compliance but also help businesses minimise reporting risks and confidently address future transfer pricing assessments. Businesses managing GST and income tax compliance alongside transfer pricing can find related guidance through SBC’s GST Advisory Services. With the right planning and technical support, organisations can transform this regulatory change into an opportunity to strengthen their overall transfer pricing governance.