Section Explainer · Income Tax
92cd Of Income Tax Act (India, 2026)
Section 92CD of the Income-tax Act is one of those provisions people reach only when they have signed, or are about to sign, an advance pricing agreement with the tax department. It is not about everyday salary or small-business returns, it is about what happens to returns that were already filed for years that an agreement later covers. This guide explains, in simple terms, what a modified return under 92CD is, who files it, the time you get, and how it changes the assessment, then shows where a verified CA fits.
- What it is: section 92CD governs the modified return filed after an advance pricing agreement covers past years.
- Who files: the taxpayer who entered into the APA, for each covered year.
- Time limit: within three months from the end of the month the agreement was entered into.
- Basis: income is recomputed on the agreed transfer pricing method.
- Assessment: the officer modifies a completed assessment or completes a pending one using the modified return.
- Who it affects: mainly companies and groups with cross-border related-party transactions, not salaried individuals.
01What section 92CD is about
Section 92CD sits inside the transfer pricing part of the Income-tax Act. In short, it tells a taxpayer what to do with returns already filed for past years once an advance pricing agreement (APA) is signed that also covers those past years.
When an APA is entered into, it can apply to years for which you have already filed your return. Those old returns no longer match the pricing the agreement now fixes. Section 92CD requires you to file a modified return for each of those covered years so the figures line up with the agreement.
This is a transfer pricing provision
Section 92CD only matters where transfer pricing and an advance pricing agreement are in play. It does not apply to an ordinary salaried return or a simple small-business return.
02What an advance pricing agreement is
An advance pricing agreement is an agreement between a taxpayer and the Central Board of Direct Taxes that fixes, in advance, how the price of transactions between related parties (usually across borders) will be worked out for tax. Its purpose is to remove uncertainty and future disputes over transfer pricing.
- It is entered into under the APA scheme (sections 92CC and 92CD read together).
- It can cover a block of future years, and it can also roll back to a set number of earlier years.
- Once signed, it binds both the taxpayer and the department for the covered years, as long as conditions are met.
The rollback is where 92CD comes in: the earlier years were already filed on the old basis, so a corrected return is needed.
03The modified return and its time limit
For every past year an APA covers, section 92CD requires a modified return in line with the agreement.
| Point | What the section provides |
|---|---|
| Who files | The taxpayer who entered into the advance pricing agreement |
| What is filed | A modified return for each covered year, in line with the APA |
| Time limit | Within three months from the end of the month in which the agreement was entered into |
| Basis | The income is recomputed as per the agreed pricing method |
The three-month clock starts from the end of the month the agreement is signed, not from the end of the financial year, so it is easy to miss if you are not watching for it.
04How assessment is affected
Filing a modified return does not simply replace the old one in a vacuum. The section lays out how the assessing officer deals with it, depending on where the earlier assessment stood.
- If the assessment or reassessment for that year was already completed, the officer passes an order to modify the total income, taking the modified return into account.
- If the assessment or reassessment was still pending, the officer completes it on the basis of the modified return.
- Time limits for completing or modifying the assessment are provided so the process does not stay open indefinitely.
The aim is that, after the dust settles, the tax for each covered year reflects the agreed transfer pricing and nothing else is reopened without cause.
05Who this actually applies to
In practice, section 92CD is relevant to companies and groups with cross-border related-party transactions that have gone through the APA process. It is a specialist area, not something a salaried taxpayer or a small domestic business will normally touch.
If you have landed here while researching ordinary return filing, the sections you are more likely to need are different ones. For how scrutiny notices work, see section 143 of the Income-tax Act, and for a capital-gains exemption many individuals use, see section 54F of the Income-tax Act. If you run a business and want your books and filings handled cleanly, a bookkeeping and accounting service is usually the better starting point than a transfer pricing provision.
06How Claw Tax helps
Claw Tax and Accounts is an online tax, GST and accounting service for India that connects you with a verified chartered accountant at a fixed, published price, with a Claw reviewer checking every filing before it is submitted.
A modified return under section 92CD is specialist transfer pricing work, and the figures have to match a signed agreement to the rupee, within a three-month window that is easy to miss. This is exactly the kind of filing where a verified chartered accountant earns their fee. With Claw Tax and Accounts, a verified CA handles the return at a fixed, published price, a Claw reviewer checks it before it is submitted, and reminders are set so the time limit is not lost. For ordinary returns, much of the groundwork can be done yourself on the portal; it is the complex, deadline-bound matters like this where review matters most.
This is an online service, and it is not tax advice; a verified CA handles your specifics.
07Frequently asked questions
What is section 92CD of the Income-tax Act in simple terms?
Section 92CD tells a taxpayer what to do with returns already filed for past years once an advance pricing agreement covers those years. It requires a modified return for each covered year so the figures match the agreed transfer pricing, and it sets out how the assessing officer deals with that return. It is a transfer pricing provision, not a general return-filing rule.
Who has to file a modified return under 92CD?
The taxpayer who entered into the advance pricing agreement has to file a modified return for each past year the agreement covers. This is almost always a company or a group with cross-border related-party transactions that has gone through the APA process, so it does not apply to a salaried individual or an ordinary small domestic business.
What is the time limit to file the modified return?
The modified return must generally be filed within three months from the end of the month in which the advance pricing agreement was entered into. The clock starts from the signing month, not the end of the financial year, so it is easy to miss. Confirm the exact window for the relevant assessment year before relying on it.
What happens to an assessment that is already complete?
If the assessment or reassessment for a covered year was already completed, the assessing officer passes an order to modify the total income, taking the modified return into account. If it was still pending, the officer completes it using the modified return. Time limits are provided so the process is not left open without end.
Does section 92CD apply to a salaried person or small business?
No. Section 92CD is part of the transfer pricing framework and applies only where an advance pricing agreement is involved, which is a specialist situation for companies and groups with related-party, usually cross-border, transactions. A salaried person or a simple small business will not normally deal with it and should look at the sections that govern ordinary returns instead.
Is the section number the same under the new Income-tax Act?
The Income-tax Act 2025 is replacing the 1961 Act, and section numbers can change in the new law. The advance pricing agreement framework is expected to continue in substance, but you should confirm the exact section number and wording for the relevant assessment year on incometax.gov.in or with a verified CA before you rely on a specific reference.