Form 3CEB: How to file form 3CEB in India, due date, and applicability
Mar 14, 2024
A company must submit form 3CEB if it engages in international transactions with associated enterprises or specific domestic transactions in India. In simpler terms, a company must fill out the 3CEB if it transfers money among its subsidiaries.
The 3CEB falls under transfer pricing regulations in India. In this blog, we’ll look at Indian transfer pricing and how it relates to form 3CEB. Specifically, we will explore the applicability of the form for most international businesses in India, the due dates, and the procedure for filing form 3CEB.
What is transfer pricing?
Transfer pricing represents the price at which one business/division charges it's associated business/division for goods or services provided. You can learn more about transfer pricing here.
Form 3CEB ensures these intercompany transfers are conducted at fair market prices to prevent transfer pricing manipulation for profit shifting and tax fraud. In other words, form 3CEB shows the Indian government that your company has fairly priced goods and services involved in cross-entity transfers.
When is Form 3CEB Due for AY 2024-2025?
The due date for filing Form 3CEB (for Assessment Year 2024-25) applicable to companies required to furnish a report under Section 92E of the Income Tax Act is October 31st, 2024.
When does Form 3CEB Apply?
A company must submit form 3CEB if it engages in international transactions with associated enterprises or specific domestic transactions in India. This comes under the transfer pricing regulations in India.
As an example, let’s imagine Silk Pvt. Ltd, an Indian subsidiary company of Global Cotton Enterprises headquartered in the United States. At some point during the year, Silk Pvt. Ltd. “sells” its silk fabric to Cotton Enterprises, even though these entities are part of the same ownership structure. To make sure that this sale was fair, meaning the prices weren’t artificially deflated, Silk Pvt. Ltd. must submit form 3CEB.
As a reminder, form 3CEB reports transfer pricing, which represents the price at which one business/division charges its associated business/division for goods or services provided.
International transactions:
Form 3CEB applies to transactions between two or more connected companies, with at least one being a foreign entity. It covers transactions including:
Sales/Lease of assets
Loans/Advances
Provision of services
Companies must submit this form regardless of the value of their international transactions.
Domestic transactions:
Form 3CEB also applies to a few transactions between two or more connected domestic companies. For domestic transactions, filing only if the value exceeds Rs. 20 crore in a fiscal year is necessary.
How to apply for Form 3CEB online?
Here is the procedure for filing a form 3CEB online:
Step 1: Onboard a Chartered Accountant (CA) on the E-filing portal
You will first need to log in to your e-filing tax portal account. Once you log in, navigate to the ‘My Chartered Accountants’ page and add your licensed Chartered Accountant.
Step 2: Assign form 3CEB to the Chartered Accountant (CA)
Select your CA from your list and assign the From 3CEB to them. You should be able to select their name, select the filing type, and enter the right assessment year.
Step 3: The Chartered Accountant completes the form
The portal will inform your Chartered Accountant of the new task they must accept on their dashboard. Once they do, they can fill the Form 3CEB on your behalf.
Step 4: Complete filing with digital signature certificates (DSC)
To submit the form, both the business taxpayer and the CA must have a valid Digital Signature Certificate for filing Form 3CEB.
Note: Form 3CD is a mandatory tax document that must be submitted along with Form 3CED. While Form 3CEB offers a detailed look into a company's tax-related information, Form 3CD provides an even more comprehensive overview of various aspects of a company's transactions.
Click here to view/download the PDF format for Form 3CEB.
Conclusion: Form 3CEB
The Form 3CEB is an important document in the Indian transfer pricing process. It ensures that businesses practice fair and transparent international and domestic transactions within their entities.
If you’re looking for help with transfer pricing payments and filing Form 3CEB
Book a free Form 3CEB consultation now→
You can also explore Commenda's global incorporation and compliance monitoring product for expanding to new markets.
Form 3CEB: Frequently Asked Questions:
What is the penalty for not filing Form 3CEB?
The penalties for non-compliance with the requirements for the Form 3CEB are:
The fine for not filing the form in the required format is a minimum of INR. 1,00,000
There is a 2% fine on the transaction amount if there is inadequate data or error on the transaction.
What should I do if my “DSC is Invalid” for form 3CEB?
While uploading the Digital Signature Certificate (DSC), You should ensure that:
Your DSC is valid and has not expired
Your DSC Is registered on the Income tax portal
Your DSC management utility or emBridge is updated
