Section 167
Section 167: power of the Board to make safe harbour rules
Section 167 lets the Board frame "safe harbour" rules - circumstances in which the declared transfer price, or the income deemed to accrue or arise in India under Section 9(2), is simply accepted by the income-tax authorities rather than being scrutinised for arm's length compliance.
What the section provides
The determination of (a) income referred to in Section 9(2), or (b) the arm's length price under Section 165 or 166, is subject to safe harbour rules.
For this purpose, the Board may make rules for safe harbour.
What "safe harbour" means
"Safe harbour" means circumstances in which the income-tax authorities shall accept the transfer price, or the income deemed to accrue or arise under Section 9(2), as declared by the assessee.
Frequently asked questions
What does a safe harbour rule do?
It sets out circumstances in which the income-tax authorities accept the transfer price or the Section 9(2) income declared by the assessee, without a separate arm's length price dispute.
Who frames the safe harbour rules?
The Board, under the rule-making power given by Section 167(2).
Related sections
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Ask our tax team about safe harbour eligibilityLast updated 9 September 2026