Which one of the following sections of the Income Tax Act, 1961 defines the method for computing Arm's Length Price?

Correct option is C

Section 92C of the Income Tax Act, 1961, specifically deals with the determination of the Arm's Length Price (ALP) for transactions between related parties, ensuring that these transactions are carried out at market rates.
Information Booster
1. Arm's Length Price (ALP) ensures that transactions between related parties are taxed as if they were carried out between independent entities.
2. The Transfer Pricing rules under Section 92C aim to prevent profit shifting through manipulated pricing strategies.
3. Section 92C provides methods like the Comparable Uncontrolled Price Method (CUP), Cost Plus Method, and others for determining ALP.
Additional Information
· Option (a) Incorrect: Section 90C pertains to bilateral or multilateral agreements related to tax treaties.
· Option (b) Incorrect: Section 91C relates to the taxation of foreign income in India, not ALP.
· Option (d) Incorrect: Section 93C is not relevant to ALP.