Section 164 - Meaning of specified domestic transaction
Domestic transfer pricing is not a general related-party rule. First identify a transaction expressly listed in section 164; then aggregate the covered value and test the ₹20 crore gateway.
Reviewed by CA Nikhil Gupta · Updated 9 October 2026
Current law and effective date
Section 164 is controlled against the consolidated Income-tax Act, 2025 as amended by the Finance Act, 2026. The Act and Income-tax Rules, 2026 operate from 1 April 2026; earlier years and saved proceedings require the repeal-and-savings framework rather than automatic migration.
Primary statute: Income Tax Department consolidated Act | Rules: Notified Income-tax Rules, 2026
Finance Act 2026 amendment source: Official Notes on Clauses / amendment materials
2-minute decode
Domestic transfer pricing is not a general related-party rule. First identify a transaction expressly listed in section 164; then aggregate the covered value and test the ₹20 crore gateway.
Who should use this section
Taxpayers entering covered domestic dealings whose aggregate value and transaction category can bring them into specified-domestic-transaction transfer pricing.
Old-law bridge
section 92BA
The old-law bridge is navigational, not automatic precedent transfer. Match the 1961 Act wording, saved proceedings, current 2025 Act text and effective date before importing an older interpretation.
Finance Act 2026 / current-law note
Finance Act, 2026 amended the specified-domestic-transaction definition by removing the former section 144 reference from the relevant limb. Use the post-amendment transaction perimeter.
Professional alert
Application caution Do not include every Companies Act or accounting related-party transaction. Section 164 is a closed statutory gateway, subject to prescribed additions.
Connected Income-tax Rules, 2026 and Forms
| Rule | Current control | Form |
|---|---|---|
| Rule 77-81 | Specified-domestic-transaction / arm's-length framework | - |
Worked application
Two eligible businesses of the same taxpayer transfer goods internally. The transaction enters Chapter X only if it is within section 164 and the aggregate covered domestic transactions cross the statutory threshold.
Evidence / compliance checklist
- unit-wise ledgers (section 164 evidence control 1).
- deduction computations (section 164 evidence control 2).
- internal transfer policies (section 164 evidence control 3).
- aggregate transaction register (section 164 evidence control 4).
Common mistake
A common section 164 error is to apply the old-law label or headline rate without rebuilding the current statutory conditions. For “Meaning of specified domestic transaction”, the safer control is to test the exact taxpayer/transaction facts, the operative tax year, every linked Rule/Form and the Finance Act 2026 consolidated wording. Application caution Do not include every Companies Act or accounting related-party transaction. Section 164 is a closed statutory gateway, subject to prescribed additions.
Recommended approach
For section 164, start with the legal trigger in “Meaning of specified domestic transaction”, document the evidence for that trigger, then run the computation or procedural step against the current text. As a cross-check, verify this provision-specific checkpoint: Specified domestic transaction aggregate gateway: more than Rs 20 crore, subject to the current transaction categories.
Thresholds, periods and timing checkpoints
- Specified domestic transaction aggregate gateway: more than Rs 20 crore, subject to the current transaction categories.
Related provisions and interaction map
Section 164 forms part of the sections 161-173 transfer-pricing code; apply Rules 77-124 only as relevant and cross-check sections 263, 286/296 plus treaty / PE provisions for this section.
Provision summary - verify verbatim text in the official Act
Text-status note: This guide does not reproduce the complete verbatim provision for section 164. Use the linked official consolidated Act before quoting sub-section language or preparing a filing, opinion or litigation document.
Primary-source trail
Statute: Income-tax Act, 2025 as amended by Finance Act, 2026
Rules: Income-tax Rules, 2026
Law navigation: Income Tax Department 2025 Act / Rules hub
Quoting note: Use the official consolidated Act for verbatim legislative language.
FAQs
Does an old Income-tax Act, 1961 case automatically decide section 164?
No. The old-law bridge helps research, but transferability depends on materially matching language, transition rules and any Finance Act 2026 change.
Which text should be quoted in advice or litigation?
Quote the consolidated official statute for the relevant tax year. If this page presents a provision summary rather than complete statutory text, use the official consolidated Act for verbatim legislative language.