The existing provisions of section 92BA of the Act, inter-alia provides that any expenditure in respect of which payment has been made by the Assessee to certain "specified persons" under section 40A(2)(b) are covered within the ambit of specified domestic transactions. As a matter of compliance and reporting, taxpayers need to obtain the chartered accountant's certificate in Form 3CEB providing the details such as list of related parties, nature and value of specified domestic transactions (SDTs), method used to determine the arm's length price for SDTs, etc. This has considerably increased the compliance burden of the taxpayers.

In order to reduce the compliance burden of taxpayers, Finance act, 2017 has amended Income tax Act, 1961 to exclude expenditure in respect of which payment has been made by the Assessee to a person referred to in under section 40A(2)(b) from the scope of section 92BA of the Act.

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