The Central Board of Direct Taxes vide Notification No. 25/2020/ F. No. 370142/14/2020-TPL dated May 20, 2020 has notified that the rates applicable from AY 2017-18 to 2019-20 will continue to apply for AY 2020-2021 (April 2019- March 2020). The applicable Safe Harbour rates for AY 2020-21 are as below:
|
Sl. No. |
Eligible
international transactions |
Safe Harbour
rates- applicable for AY 2020-2021 |
|
1 |
Provision of Software
development services (IT) and Information Technology Enabled Services (ITES) |
Operating
profit margin to operating expense ·
Where the aggregate value of
such transactions ≤ Rs.100 crore –
not less than 17% ·
Where the aggregate value of
such transactions > Rs.100 crore < Rs.200 crore – not less than 18% |
|
2 |
Provision
of knowledge process outsourcing services (KPO) |
The value of international transaction ≤ Rs.200 crore
and the operating profit margin to operating expense is – ·
Not less than 24%, if the
Employee Cost to Operating Expense is at least 60% ·
Not less than 21% ,if the
Employee Cost to Operating Expense is greater than 40% or more but less than
60%; or ·
Not less than 18%, if the
Employee Cost to Operating Expense does not exceed 40%. |
|
3 |
Provision of corporate guarantee |
Not less than 1% per annum on
the amount guaranteed |
|
4 |
Provision of specified contract research
and development services wholly or partly relating to
software development |
The operating profit margin to operating expense not less than
24%, where the value of the international transaction is ≤ Rs.200
crore |
|
5 |
Provision of contract research and
development services wholly or partly relating to generic pharmaceutical drugs |
The operating profit margin to operating expense not less than
24%, where the value of the international transaction is ≤ Rs.200
crore |
|
6 |
Manufacture
and export of: |
Operating
profit margin to operating expense: |
|
|
·
core auto components ·
non-core auto components |
·
Not less than 12% ·
Not less than 8.5% |
|
7 |
Receipt of low value-adding intra-group
services |
Aggregate value of such
transactions (including mark up not exceeding 5%),
does not exceed Rs.10 crore |
|
8 |
Advancing of intra-group loans where the
amount of loan is denominated in Indian Rupees (INR) |
The interest rate declared in relation to the eligible
international transaction is not less than the one-year marginal cost of
funds lending rate of State Bank of India as on 1st April of the relevant
previous year plus basis points as below: ·
175 basis points, where the
associated enterprise has CRISIL credit rating between AAA to A or its
equivalent ·
325 basis points, where the
associated enterprise has CRISIL credit rating of BBB-, BBB or BBB+ or its
equivalent ·
475 basis points, where the
associated enterprise has CRISIL credit rating between BB to B or its equivalent ·
625 basis points, where the
associated enterprise has CRISIL credit rating between C to D or its equivalent ·
425 basis points, where
credit rating of the associated enterprise is not available and aggregate
amount of loan advanced to all associated enterprises as on 31st March of the
relevant previous year < Rs.100 crore |
|
9 |
Advancing of intra-group loans referred to
in item (iv) of rule 10TC where the amount of loan is denominated in foreign currency. |
The interest rate declared in relation to the eligible
international transaction is not less than the six-month London Inter-Bank
Offer Rate of the relevant foreign currency as on 30th September of the
relevant previous year plus basis points as
below: ·
150 basis points, where the
associated enterprise has |
|
|
|
CRISIL credit rating between AAA to A or its
equivalent ·
300 basis points, where the
associated enterprise has CRISIL credit rating of BBB-, BBB or BBB+ or its
equivalent ·
450 basis points, where the
associated enterprise has CRISIL credit rating between BB to B or its equivalent ·
600 basis points, where the
associated enterprise has CRISIL credit rating between C to D or its equivalent ·
400 basis points, where
credit rating of the associated enterprise is not available and aggregate
amount of loan advanced to all associated enterprises as on 31st March of the
relevant previous year < Rs.100 crore |
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