Master File and CbCR in India: Thresholds, Forms, and Group Obligations

India is one of the most documentation-intensive transfer pricing jurisdictions in the world. When the Organisation for Economic Co-operation and Development (OECD) released the Base Erosion and Profit Shifting (BEPS) Action 13 framework in 2015, India moved faster than most countries to embed it into domestic law. By 2016, Rules 10DA and 10DB had been inserted into the Income-tax Rules, 1962, creating binding obligations for Indian constituent entities of qualifying international groups. As of Tax Year 2026-27, those obligations are being recodified under the Income-tax Act, 2025 and the Income-tax Rules, 2026, with revised forms numbered 56 through 60 replacing the earlier 3CEAA series. The substance of the requirements is unchanged; the form numbering, the legislative anchors, and some procedural mechanics have been updated.

What is the threshold for master file filing in India?

The master file (Part B) in India is required when two conditions are satisfied simultaneously: the international group’s consolidated revenue exceeds ₹500 crore in the relevant accounting year, and the Indian constituent entity’s aggregate value of international transactions exceeds ₹50 crore (or ₹10 crore for transactions involving intangible property) during that year. Part A of the master file form is mandatory for all constituent entities of an international group, regardless of whether these thresholds are met. This dual-threshold structure is specific to India and differs from the single-revenue threshold used in most other OECD member jurisdictions.

Why India adopted the three-tier documentation framework

The OECD’s BEPS Action 13 framework introduced a coordinated approach to transfer pricing documentation: a local file covering entity-level transaction details, a master file providing group-level context, and a Country-by-Country Report (CbCR) giving tax authorities jurisdiction-wide financial data. India adopted all three tiers through amendments to the Income-tax Act, 1961 in 2016. Section 92D was amended to require constituent entities to maintain master file information, and Section 286 was inserted to mandate CbCR filing.

The rationale is straightforward. Tax authorities cannot meaningfully assess whether an Indian subsidiary’s intercompany pricing is arm’s length without understanding where the group generates value, who owns the intangibles, how the group finances itself, and what the profit allocation looks like across jurisdictions. The local file (the TP study report covered in our transfer pricing documentation guide) answers the India-specific question. The master file answers the group-level question. The CbCR answers the systemic profit-allocation question.

These three documents are not independent. Indian tax authorities use all three together. A mismatch between the master file’s characterisation of the Indian entity and the local file’s FAR analysis is one of the most reliable audit triggers. The CbCR gives the Transfer Pricing Officer (TPO) a rapid view of whether the group’s reported Indian profits are proportionate to the economic activity conducted in India.

Who is a “constituent entity” for Indian purposes?

The obligation under Section 92D and Rule 10DA applies to constituent entities of an international group. The Income-tax Act, 1961 defines an “international group” as any group that includes at least two enterprises that are tax residents of different countries, or an enterprise that is a tax resident of one country but has a permanent establishment in another country (Section 286, Explanation (d)). A “constituent entity” is any separate business entity of the international group whose financial results are included in the group’s consolidated financial statements, or would be included if the group were required to prepare consolidated statements (Section 286, Explanation (e)).

This definition is wider than many CFOs assume. Indian joint ventures between a domestic and a foreign group, Indian branch offices of foreign companies, Indian partnership firms or LLPs where one of the partners is a foreign entity, and Indian entities held by a holding company through an intermediate offshore layer are all within scope if the group’s consolidated financials include them. An Indian entity is not excluded merely because it is a minority subsidiary or because its accounts are equity-accounted rather than fully consolidated.

The master file: what it is and who must prepare it

The master file is a group-level document. It provides tax authorities with a high-level view of the international group’s overall business structure, value creation, transfer pricing policies, and financial position. Unlike the local file, which is entity-specific and transaction-specific, the master file is a single document covering the entire group, prepared once and then localised as needed for each jurisdiction in which the group operates.

Rule 10DA(1) of the Income-tax Rules, 1962 (being replaced by Rule 123 of the Income-tax Rules, 2026 from Tax Year 2026-27) sets out the information required in the Indian master file. The prescribed items span five categories:

Group business and structure: A description of the international group’s legal and ownership structure, a list of constituent entities, their countries of tax residence, and a map of the supply chain for the group’s five principal products or services by revenue.

Intangible property: A description of the group’s overall intangible property strategy, including a list of significant intangibles and the entities that legally own them; agreements among constituent entities related to intangibles (cost contribution arrangements, principal arrangements, royalty agreements); a description of the group’s policies on research and development and transfer of intangibles; and the location of R&D facilities.

Intercompany financial activities: A description of how the group finances itself, including a list of the top 10 external lenders and the financing entities within the group; a description of any general financing policies including an explanation of which entities act as group treasury or captive finance companies. The intercompany financing arrangements section of the master file is one of the first areas a TPO examines when assessing whether intragroup loans and guarantees are priced at arm’s length.

Financial and tax positions: The group’s consolidated financial statements for the relevant accounting year; a list of advance pricing agreements and unilateral rulings given by any country’s tax authority covering the Indian entity’s transactions; and a description of the group’s existing unilateral tax rulings or APAs, if any.

Functional analysis of significant contributors: A functional, asset, and risk (FAR) analysis for each constituent entity that contributes 10% or more of the group’s total revenue, assets, or profits. This India-specific 10% threshold is not found in the OECD template and means the Indian master file requires more granularity than many standard global master files provide. Groups relying on a single global document for all jurisdictions routinely fall short of India’s transfer pricing policies disclosure standard at this point.

The 10% FAR contribution threshold: where the global template falls short

This single requirement is the most common gap between a group’s standard global master file and what India’s Part B actually demands, and it is worth unpacking carefully.

The OECD’s recommended master file template (Annex I to Chapter V of the OECD Transfer Pricing Guidelines) asks for a general description of the MNE’s value chain and supply chain. It does not mandate a full FAR analysis for every entity at a specific revenue or asset contribution threshold. Many global master files therefore contain a broad functional overview describing broad categories of entities (distributors, manufacturers, R&D centres) without performing entity-level FAR analysis at the precision Rule 10DA(1)(n) requires.

India’s 10% threshold cuts across entity type. A constituent entity is subject to a full FAR analysis in Part B if it contributes 10% or more of the group’s total revenue, or 10% or more of the group’s total assets, or 10% or more of the group’s total profit. These are three independent tests. An Indian captive service centre that contributes 8% of group revenue but 14% of total consolidated profit (because it operates at high margins) clears the profit threshold independently and must be fully analysed.

The practical consequence for large groups with a significant India presence is that the Indian entity is frequently above the 10% threshold on at least one of the three measures, even when it appears small relative to the group’s global headcount or balance sheet. A 500-person Indian software development subsidiary contributing 15% of consolidated revenue must have its FAR analysis included in the master file at full Rule 10DA(1)(n) depth: who decides project scope, who manages client relationships, which risks the entity actually bears versus which are contractually shifted to the parent, which assets it owns versus licences from the group, and how it is compensated for its contributions.

The consequence of not completing this analysis is concrete. If a TPO identifies that the master file lacks a FAR analysis for the Indian entity despite the entity clearing the 10% contribution threshold, the master file is treated as incomplete, which is functionally equivalent to non-filing for purposes of the ₹5,00,000 penalty and the entity’s overall TP audit risk profile. Groups should confirm, before Part B is finalised, whether any Indian constituent entity clears any of the three 10% tests and build the corresponding FAR analysis in before filing.

Part A vs Part B: the distinction that most groups overlook

Form 3CEAA (and its successor Form 56 from Tax Year 2026-27) has two parts. This distinction has material compliance consequences.

Part A requires only basic identification information: the name and PAN of the constituent entity, the name and address of the international group, and the country of tax residence of the ultimate parent entity. Every constituent entity of an international group with any presence in India must file Part A, regardless of the group’s consolidated revenue or the Indian entity’s transaction volume. There is no threshold for Part A. If you are a constituent entity of an international group in India, Part A is mandatory.

Part B is the full master file disclosure containing all the group-level information listed above. Part B is required only when both of the following conditions are satisfied:

• The consolidated revenue of the international group as per its consolidated financial statements exceeds ₹500 crore for the accounting year; and
• The aggregate value of international transactions entered into by the Indian constituent entity during that accounting year exceeds ₹50 crore (or ₹10 crore if the transactions relate to purchase, sale, transfer, lease, or use of intangible property).

If only the group revenue threshold is met but the Indian entity’s international transaction value is below ₹50 crore (₹10 crore for intangibles), Part B is not required, only Part A. If the group revenue threshold is not crossed, again only Part A is required. Part B is triggered exclusively when both conditions are satisfied together.

This structure has a practical consequence that many mid-sized MNE groups miss. An Indian entity might be part of a large group (consolidated revenue exceeding ₹500 crore) but have limited intercompany transactions below the ₹50 crore threshold. That entity still needs to file Part A. Failing to file Part A because Part B is not triggered is a penalty-attracting error.

Threshold summary for master file

Condition	Part A required?	Part B required?
Group revenue < ₹500 crore	Yes	No
Group revenue > ₹500 crore; Indian IT < ₹50 crore (< ₹10 crore for intangibles)	Yes	No
Group revenue > ₹500 crore; Indian IT > ₹50 crore (or > ₹10 crore for intangibles)	Yes	Yes

Form 3CEAA (Form 56 from Tax Year 2026-27): filing mechanics

Under the 1961 Act framework (applicable for FY 2025-26 and all earlier years), the master file is filed in Form 3CEAA with the Joint Commissioner of Income Tax (Transfer Pricing) having jurisdiction over the Indian constituent entity. From Tax Year 2026-27, Form 3CEAA is replaced by Form 56, governed by Section 171(4) of the Income-tax Act, 2025 and Rule 123 of the Income-tax Rules, 2026.

The filing is electronic, through the income tax e-filing portal. The constituent entity files using its own digital signature certificate.

Due date: 30 November following the end of the relevant financial year. For FY 2025-26, the due date for Form 3CEAA is 30 November 2026. For Tax Year 2026-27 (under the new Act), Form 56 is due on 30 November 2027.

This is a different due date from the local file and Form 3CEB (or Form 48), which are due on 31 October. The master file has a one-month extension relative to the TP study certification deadline. That additional month exists for a reason: Part B of the master file often requires data from the group’s consolidated financial statements, which may not be finalised until after the local financial year has closed.

Documentation retention: Master file documentation must be maintained for eight years from the end of the relevant assessment year, consistent with the general TP documentation retention rule under Rule 10D(6).

Form 3CEAB (Form 57 from Tax Year 2026-27): the designation intimation

An international group operating in India through more than one constituent entity would, in theory, need each constituent entity to file its own master file. Rule 10DA(4) provides a practical alternative: the group may designate one constituent entity to file the master file on behalf of all Indian constituents. To exercise this option, the designated entity must notify the Director General of Income Tax (Risk Assessment) (DGIT-RA) in Form 3CEAB at least 30 days before the due date for filing Form 3CEAA.

From Tax Year 2026-27, this intimation is filed in Form 57 under Rule 123(4) of the Income-tax Rules, 2026.

The 30-day window is a hard deadline, not a soft one. If Form 3CEAB is not filed at least 30 days before 30 November (i.e., by 31 October), the designation right is lost for that year. Every constituent entity then must file its own master file independently. Missing this window is a recurring practical error in multi-entity MNE groups where the India tax team assumes the group centre will handle it and the group centre assumes the India team has handled it.

A 2021 amendment to Rule 10DA clarified that any Indian constituent entity of an international group, regardless of residential status, may be designated to file Form 3CEAB. The earlier rule restricted designation to resident constituent entities only. This change is relevant for groups where the Indian presence includes branches of foreign companies or where the most administratively capable entity is a non-resident one.

Country-by-Country Reporting in India: the ₹6,400 crore threshold

CbCR obligations are governed by Section 286 of the Income-tax Act, 1961 (Sections 510-512 of the Income-tax Act, 2025) and Rule 10DB of the Income-tax Rules, 1962 (Rule 124 of the Income-tax Rules, 2026 from Tax Year 2026-27).

The CbCR is a group-level report that discloses, for every tax jurisdiction in which the group operates, the following information aggregated by jurisdiction:

• Revenue from related and unrelated parties
• Profit or loss before income tax
• Income tax paid (on a cash basis)
• Income tax accrued
• Stated capital
• Accumulated earnings
• Number of full-time equivalent employees
• Tangible assets other than cash

Additionally, for each constituent entity of the group, the CbCR identifies the entity’s country of tax residence, the country under whose laws it is organised, and the nature of its business activities.

Tax authorities use CbCR as a risk assessment tool, not a transaction-level audit document. The concern CbCR is designed to address is profit allocation: is the group reporting disproportionately high profits in low-tax jurisdictions with limited economic activity? Is India, which typically has substantial employees, assets, and revenue, receiving a proportionate share of the group’s profits? Mismatches between CbCR disclosures and local financial statements are a systematic audit trigger.

What is the CbCR threshold in India?

The CbCR obligation applies to international groups whose consolidated revenue as per the consolidated financial statements for the immediately preceding accounting year exceeds ₹6,400 crore. This threshold was updated from ₹5,500 crore to ₹6,400 crore with effect from 01 April 2021 through Notification No. 31/2021 (CBDT, 05 April 2021), to better align with the OECD’s EUR 750 million threshold, given movement in the INR/EUR exchange rate.

The threshold is applied to the consolidated revenue of the preceding year, not the current reporting year. For CbCR due for the accounting year ending 31 March 2026, the relevant threshold check is the group’s consolidated revenue for the accounting year ending 31 March 2025.

The obligation runs annually and switches on and off depending on the preceding year’s revenue. A group whose consolidated revenue crossed ₹6,400 crore in FY 2024-25 has a CbCR obligation for FY 2025-26 even if FY 2025-26 revenue itself fell below the threshold. Conversely, a group that first crossed ₹6,400 crore in FY 2025-26 has no CbCR obligation for FY 2025-26 (because the threshold check uses FY 2024-25 revenue, which was below the limit), but will have an obligation for FY 2026-27. Document the threshold determination each year independently.

Worked example: revenue-volatile group

A group reports consolidated revenue as follows: FY 2023-24: ₹5,900 crore (below threshold); FY 2024-25: ₹7,100 crore (above threshold); FY 2025-26: ₹6,200 crore (above threshold as preceding-year revenue was ₹7,100 crore); FY 2026-27: ₹5,800 crore (no obligation, as preceding-year revenue was ₹6,200 crore, which is below ₹6,400 crore).

The CbCR obligation therefore exists for FY 2025-26 and FY 2026-27, but not for FY 2023-24 or for the period after FY 2026-27 if revenue stays below the threshold. A compliance team that checks the current year’s revenue instead of the preceding year’s revenue will miss the FY 2025-26 obligation entirely.

First-year threshold crossing: no grace period

A common assumption, particularly for rapidly growing groups, is that an obligation crossed for the first time partway through a financial year takes effect from the following year. That is not how Indian master file or CbCR rules operate.

If a group’s consolidated revenue exceeds ₹500 crore for the first time in FY 2025-26 (due, for example, to an acquisition completed in October 2025), the Part B master file obligation is live for FY 2025-26 itself. The Part B is due on 30 November 2026 covering that same year. There is no transitional year and no notification mechanism by which CBDT informs the group that the threshold has been crossed. The obligation is self-assessed based on the group’s consolidated financial statements.

The same applies to CbCR: if the preceding year’s consolidated revenue first exceeds ₹6,400 crore, the CbCR is due for the current year with no buffer period. For groups growing through acquisition, the threshold check must be performed immediately after any deal closes that could push consolidated revenue above either limit.

Key thresholds at a glance

Obligation	Threshold	Applicable revenue year
Master file Part A	None	Current accounting year
Master file Part B	Group consolidated revenue > ₹500 crore AND Indian IT > ₹50 crore (or > ₹10 crore for intangibles)	Current accounting year
CbCR	Group consolidated revenue > ₹6,400 crore	Preceding accounting year
CbCR intimation (Form 3CEAC/Form 58)	CbCR threshold met; parent entity not Indian resident	Current year

The four CbCR forms: who files what and when

CbCR compliance in India does not operate through a single form. There are four forms, each applicable to a different fact pattern. Getting the right form wrong (or missing one that applies to you) is a common compliance failure.

Form 3CEAD (Form 59 from Tax Year 2026-27): the CbCR itself

Before describing the form, one structural concept requires definition: the alternate reporting entity (ARE). Under Section 286, Explanation (f) of the Income-tax Act, 1961, an ARE is a constituent entity of the international group that is not the ultimate parent entity (UPE) but has been designated by the group to file the CbCR on its behalf in a particular jurisdiction. The ARE mechanism is used when the UPE’s home jurisdiction does not require CbCR filing (making bilateral exchange unavailable), or when the group’s holding structure makes it more administratively efficient for a sub-holding company to file CbCR in its home jurisdiction. The ARE must meet the same eligibility conditions as a UPE for filing purposes and is subject to the same annual obligations. An Indian entity can be designated as the ARE for the group, in which case it files Form 3CEAD in India. Alternatively, a foreign entity may be the ARE, in which case the CbCR is filed abroad and India receives it through exchange (with Form 3CEAC filed by the Indian CEs to notify DGIT-RA).

Form 3CEAD is the actual Country-by-Country Report. It is filed by the parent entity (ultimate parent entity or alternate reporting entity) that is resident in India, or by an Indian constituent entity in secondary mechanism situations (discussed below). The form has two parts:

Part A requires jurisdiction-wise aggregate financial information. Part B requires a list of all constituent entities in each jurisdiction, their country of incorporation, their tax residence, and their principal business activities (manufacturing, R&D, holding, finance, dormant, etc.).

Form 3CEAD is due within 12 months from the end of the reporting accounting year. For an Indian group with a March year-end, the CbCR for FY 2025-26 is due by 31 March 2027. For a foreign parent group with a December year-end, the CbCR for the year ending 31 December 2025 is due by 31 December 2026.

From Tax Year 2026-27, Form 3CEAD is replaced by Form 59 under Section 511(2) of the Income-tax Act, 2025 and Rule 124 of the Income-tax Rules, 2026.

Form 3CEAC (Form 58 from Tax Year 2026-27): CbCR intimation for inbound groups

Form 3CEAC is an intimation, not the CbCR itself. It must be filed by every Indian constituent entity of an international group whose parent entity is not resident in India. The form notifies the DGIT-RA of:

• Whether the filing entity is itself an alternate reporting entity of the group; or
• The identity and country of tax residence of the parent entity or alternate reporting entity, and in which country the CbCR will be filed.

Form 3CEAC serves a critical administrative purpose. It tells Indian tax authorities where to look for the CbCR through bilateral Automatic Exchange of Information (AEOI) arrangements, rather than requiring every Indian subsidiary of a foreign group to re-file the same global report locally. If India has an active bilateral Competent Authority Agreement (CAA) with the country where the parent entity has filed, India will receive the CbCR through the exchange mechanism rather than through direct filing by the Indian subsidiary.

Due date: Form 3CEAC must be filed at least two months before the due date for filing the CbCR report. For a group with a March year-end, the CbCR is due by 31 March; Form 3CEAC is therefore due by 31 January. For a group with a December year-end (the most common for US, European, and Japanese parent groups), the CbCR is due by 31 December; Form 3CEAC is due by 31 October.

Every Indian constituent entity of the group must file its own Form 3CEAC, even if only one entity will ultimately file the CbCR in India under the secondary mechanism. The forms are not optional for the non-designated entities.

From Tax Year 2026-27, Form 3CEAC is replaced by Form 58 under Section 511(1) of the Income-tax Act, 2025.

Form 3CEAE (Form 60 from Tax Year 2026-27): intragroup designation for CbCR

Where multiple Indian constituent entities exist and the group wishes to designate one to file the CbCR on behalf of all of them (in secondary mechanism situations), Form 3CEAE is used to notify the DGIT-RA of that designation. This is the CbCR equivalent of Form 3CEAB for the master file.

From Tax Year 2026-27, Form 3CEAE is replaced by Form 60 under Section 511(5) of the Income-tax Act, 2025.

Compliance matrix: CbCR forms by situation

Situation	Form to file	Who files it
Indian entity is the ultimate parent	Form 3CEAD (Form 59 from TY 2026-27)	Indian parent entity
Indian entity is an alternate reporting entity	Form 3CEAD (Form 59 from TY 2026-27)	Indian ARE
Indian subsidiary of a foreign parent; parent files CbCR in home country with exchange agreement	Form 3CEAC (Form 58)	Every Indian CE
Indian subsidiary; secondary mechanism applies (no exchange agreement or systematic failure)	Form 3CEAD (Form 59) + Form 3CEAE (Form 60) if multiple CEs	Designated Indian CE
Multiple Indian CEs in secondary mechanism	Form 3CEAC (Form 58) by all; Form 3CEAE (Form 60) for designation; Form 3CEAD (Form 59) by designated CE	All Indian CEs; designated files the report

Non-March parent year-ends: how the compliance calendar stacks

The examples in most India-focused CbCR guides use March year-ends, because that is the Indian financial year. A significant share of inbound MNE groups have parent entities with December, June, or September year-ends, which creates a timing overlay that is easy to miscalculate.

The master file due date (30 November) is always anchored to the Indian financial year, not the parent’s year-end. Form 3CEAB for designation must be filed by 31 October regardless of when the parent’s year closes. These dates are fixed.

CbCR-related dates, however, are anchored to the parent’s accounting year-end:

Parent year-end	CbCR due date	Form 3CEAC due date (2 months prior)
31 March	31 March (following year)	31 January (following year)
31 December	31 December (following year)	31 October (following year)
30 June	30 June (following year)	30 April (following year)
30 September	30 September (following year)	31 July (following year)

For a group with a December parent year-end, which is the most common scenario for US, European, and Japanese MNEs, the Form 3CEAC deadline of 31 October coincides exactly with the Form 3CEAB deadline. This means the India tax team faces three separate filings all falling in October: Form 3CEB/Form 48 (31 October), Form 3CEAB/Form 57 (31 October at the latest), and Form 3CEAC/Form 58 (31 October for December year-end groups). November then brings the master file itself (30 November). Treating October as a lighter month because the master file is not yet due is a planning mistake that costs groups the designation window and the CbCR intimation deadline in the same calendar month.

The secondary mechanism: when Indian entities must file CbCR directly

Most Indian subsidiaries of foreign parent groups expect the CbCR to be handled by the parent in its home jurisdiction, with India receiving the report through automatic information exchange. That expectation is correct when three conditions are met: (a) the parent’s jurisdiction has a domestic law requirement to file CbCR, (b) that jurisdiction has entered into a bilateral Competent Authority Agreement with India for automatic exchange of CbCR, and (c) there is no “systematic failure” of exchange.

When any of these conditions is not met, the obligation shifts to India. Section 286(4) of the Income-tax Act, 1961 (Section 511 of the 2025 Act) creates a secondary filing mechanism that operates in two specific situations.

Situation 1: No exchange agreement with India

If the parent entity’s country of tax residence does not have a bilateral agreement with India for automatic exchange of CbCR, India will not receive the report through the exchange mechanism. In that case, the Indian constituent entity must file Form 3CEAD directly with the DGIT-RA within 12 months of the end of the parent’s accounting year. CBDT periodically updates the list of countries with which India has activated bilateral Competent Authority Agreements; this list is available on the income tax department’s portal. Groups with parent entities in countries on the non-exchange list must plan for direct CbCR filing in India.

In this scenario, the Indian entity files Form 3CEAC to notify DGIT-RA of the parent’s identity and the fact that direct filing will occur, and then files Form 3CEAD with the CbCR data.

Situation 2: Systematic failure

“Systematic failure” is defined as a situation where a country that has an exchange agreement with India suspends automatic exchange, or where India has notified the taxpayer that the country is not complying with the information exchange agreement. CBDT issues notifications of systematic failure for specific countries. Where systematic failure is notified, the Indian constituent entity must file Form 3CEAD directly even if an exchange agreement nominally exists.

The practical significance of systematic failure is that an Indian subsidiary cannot simply assume that because its parent is in a country with a signed AEOI agreement, the obligation is discharged. The agreement must be active and functioning. If CBDT has notified that systematic failure exists for that country, the Indian entity must file. Checking the current status of bilateral CbCR exchange arrangements is an annual compliance step, not a one-time check.

CbCR data in MAP and APA proceedings

CbCR information does more than satisfy a filing obligation. Once in the hands of tax authorities, it feeds directly into Mutual Agreement Procedure (MAP) negotiations and APA risk assessment in ways that most India tax teams do not account for when preparing the report.

In MAP proceedings under a DTAA, Indian competent authorities use the CbCR to validate whether the profit allocation claimed by the Indian entity is consistent with the group’s global profit distribution pattern. If a group’s CbCR shows that India contributes 20% of global employees and 18% of global revenue but only 6% of global profit before tax, the Indian competent authority uses that data to support the position that India is under-compensated relative to its economic contribution. That position strengthens India’s negotiating stance in MAP discussions even before transaction-level analysis begins. Conversely, if the CbCR shows Indian profit broadly proportionate to Indian economic activity, the competent authority has less ground on which to insist on large upward adjustments during MAP.

For APA applications, CBDT’s transfer pricing team reviews the CbCR as part of the pre-filing consultation to understand where India sits in the group’s overall profit allocation. An APA application supported by a CbCR that shows consistent, proportionate Indian profitability over multiple years is demonstrably easier to close than one where the CbCR flags material India under-reporting relative to the group’s overall margin structure.

The practical implication is that the CbCR is not a standalone compliance document. Its content directly affects the outcome of the two primary dispute resolution mechanisms in Indian TP. Groups preparing CbCR for the first time, or updating it after a material change in structure or business model, should review the draft CbCR in the context of any open MAP or APA discussions before it is filed.

What the new Income-tax Act 2025 changes for master file and CbCR

The Income-tax Act, 2025 (effective from Tax Year 2026-27, i.e., from 01 April 2026) recodifies the master file and CbCR provisions without changing the substantive obligations. The key changes are legislative renumbering, form renaming, and some procedural clarifications.

Legislative re-anchoring

Old provision	New provision	Subject
Section 92D (read with Rule 10DA)	Section 171 (read with Rule 123)	Master file obligation
Section 286	Sections 510-512	CbCR obligation
Rule 10DA	Rule 123	Master file rules
Rule 10DB	Rule 124	CbCR rules

Form renaming

Old form	New form	Purpose
Form 3CEAA	Form 56	Master file (Part A and Part B)
Form 3CEAB	Form 57	Master file designation intimation
Form 3CEAC	Form 58	CbCR intimation (inbound groups)
Form 3CEAD	Form 59	CbCR report by parent/ARE resident in India
Form 3CEAE	Form 60	CbCR designation intimation (inbound groups)

Transition position for FY 2025-26: All Forms 3CEAA, 3CEAB, 3CEAC, 3CEAD, and 3CEAE under the Income-tax Rules, 1962 continue to apply for FY 2025-26 (Tax Year 2025-26, Assessment Year 2026-27) and all earlier years. Forms 56-60 under the Income-tax Rules, 2026 apply from Tax Year 2026-27 (the year beginning 01 April 2026) onwards.

The Central Board of Direct Taxes published the brochure on Forms 56-60 in May 2026, confirming the new framework. The income tax department’s official descriptions of Forms 56 and 57 (Rule 123, 2026 Rules) and Forms 58, 59, and 60 (Rule 124, 2026 Rules) are now available on the department’s portal.

One clarification the 2025 Act brings is explicitly confirming that Section 171(1)(b) governs filing by a designated constituent entity, removing ambiguity that existed under Section 92D about whether the designation covered Part A as well as Part B.

Treelife practitioner note

In the master file and CbCR engagements we have run at Treelife, the most consistent problem is not wilful non-compliance. It is structural miscoordination between the India tax team and the group’s global tax centre, operating through three predictable failure modes.

The first is the 10% FAR contribution threshold gap. The group’s global master file is prepared by the head office tax function using the standard OECD template. That template does not require entity-level FAR analysis at the 10% contribution threshold that Rule 10DA(1)(n) mandates. The India team receives the global document, assumes it meets India’s requirements because it meets the group’s other jurisdictions’ requirements, and files Part B without adding the India-specific FAR analysis that the Indian entity’s revenue or profit contribution requires. We see this particularly in groups where the Indian subsidiary contributes between 12% and 25% of consolidated profit, because the entity is visibly significant but the global master file still treats it as a routine captive with a generic functional description.

The second is the exchange-status assumption for CbCR. The India team knows the parent files CbCR in its home jurisdiction. The team checks, once, that the parent’s jurisdiction has a bilateral CAA with India and concludes that Form 3CEAC is the only India obligation. What is not checked annually is whether the CAA remains active. CBDT’s list of countries in systematic failure has changed year to year, and a CAA that was active in FY 2023-24 is not guaranteed to remain active in FY 2025-26. The obligation to file Form 3CEAD directly in India is triggered by an external event that may occur without any formal notification reaching the India entity. We recommend building a CAA status check into the first quarter of every financial year as a calendar item, not a reactive check when a filing deadline approaches.

The third is first-year threshold blindness in fast-growing groups. A group whose consolidated revenue crosses ₹500 crore through an acquisition in the middle of the financial year often has no internal process that flags the Part B master file obligation for that same year. The deal team closes the acquisition, the finance team consolidates the numbers, and the tax team files Form 3CEB in October without anyone having checked whether the revenue consolidation pushed the group above the master file threshold. We have seen back-period Part B obligations surface for the first time during TP audit scrutiny, at which point two or three years of unfiled Part B expose the group to ₹5,00,000 per year in penalty.

The fix across all three modes is the same: the India tax compliance calendar should include a threshold check at the start of every financial year, covering both the master file revenue and transaction thresholds and the CbCR preceding-year revenue, and a CAA status check confirming which exchange arrangements remain active.

Full compliance calendar for master file and CbCR (Tax Year 2026-27)

Applicable rules: Income-tax Rules, 2026 (for Tax Year 2026-27). For FY 2025-26, old forms and Rules 1962 apply with same due dates.

Compliance obligation	Form (FY 2025-26)	Form (TY 2026-27)	Who files	Threshold	Due date
Master file Part A	Form 3CEAA	Form 56	Every CE in India	None	30 November
Master file Part B	Form 3CEAA	Form 56	CE meeting dual threshold	Group revenue > ₹500 Cr AND Indian IT > ₹50 Cr (or > ₹10 Cr for intangibles)	30 November
Master file designation	Form 3CEAB	Form 57	Designated CE	Multiple CEs in India; group elects to designate	At least 30 days before master file due date (by 31 October)
CbCR intimation (inbound)	Form 3CEAC	Form 58	Every Indian CE of a non-resident parent group	Group revenue > ₹6,400 Cr; parent not Indian resident	At least 2 months before CbCR due date
CbCR (parent/ARE in India)	Form 3CEAD	Form 59	Indian parent entity or ARE	Group revenue > ₹6,400 Cr; Indian parent/ARE	Within 12 months of end of parent’s accounting year
CbCR (secondary mechanism)	Form 3CEAD	Form 59	Designated Indian CE	No exchange agreement or systematic failure	Within 12 months of end of parent’s accounting year
CbCR designation (inbound, multiple CEs)	Form 3CEAE	Form 60	Designated Indian CE	Multiple CEs; secondary mechanism applies	Before filing CbCR; no specific statutory deadline (file early)

Penalties for non-compliance: the numbers

The penalty framework for master file and CbCR non-compliance is structured separately from the penalty for TP documentation failure and operates independently of whether any TP adjustment is made. For penalties on TP documentation, Form 48 non-filing, and SDT non-compliance more broadly, see Treelife’s transfer pricing audit triggers guide.

Under the Income-tax Act, 1961 (applicable through Assessment Year 2026-27)

Under Section 271AA(2), failure to furnish the master file (Form 3CEAA) attracts a penalty of ₹5,00,000. This is a flat penalty, not a transaction-based percentage.

Under Section 271GB, CbCR non-compliance attracts two structurally distinct penalty types that must not be confused:

The first type is the delay penalty, which applies to late filing of the CbCR. This is a daily graduated penalty: ₹5,000 per day of default for the first month, ₹15,000 per day for delay beyond one month, and ₹50,000 per day after the date of service of the penalty order. The day-count begins from the due date (12 months from the end of the parent’s accounting year) and runs until the form is actually filed.

The second type is the inaccuracy penalty under Section 271GB(3), which is a fixed ₹5,00,000 and applies to a CbCR that was filed on time but contains incorrect information. These two penalty types are independent. A group that files a placeholder or estimated CbCR by the due date and amends it later does not avoid the inaccuracy penalty; the placeholder filing may itself constitute an inaccurate report. A group that files a complete and accurate CbCR late attracts only the delay penalty. A group that files a late and inaccurate CbCR attracts both.

Under the Income-tax Act, 2025 (applicable from Tax Year 2026-27)

Section 442(2) of the 2025 Act preserves the ₹5,00,000 flat penalty for failure to furnish the master file.

Section 459 of the 2025 Act preserves both penalty structures: the graduated daily delay rate (₹5,000/₹15,000/₹50,000) and the fixed ₹5,00,000 for an inaccurate report, with the same independence between them.

Penalty accumulation reference

Default period	Daily rate	Running cumulative cost
Day 1 to Day 30	₹5,000/day	₹1,50,000
Day 31 to Day 60	₹15,000/day	₹6,00,000
After penalty order served	₹50,000/day	Rapidly escalating
Inaccurate report (any timing)	Fixed	₹5,00,000 (additional to delay if applicable)

For large groups, these amounts are individually manageable but the combination of daily penalties, potential TP adjustment exposure, and the risk-assessment flag that a CbCR default creates means that non-compliance with master file and CbCR obligations carries disproportionate consequences relative to the compliance effort involved.

Master file and CbCR-specific mistakes that expose groups to disproportionate scrutiny

For broader transfer pricing compliance errors covering Form 48 mismatches, SDT omissions, and captive loss triggers, see Treelife’s guide to transfer pricing audit triggers in India linked in the penalty section above. The mistakes below are specific to the master file and CbCR framework.

Missing the Part A obligation because Part B thresholds are not crossed. The most frequent error in multi-entity groups. A constituent entity of a large international group has intercompany transactions below ₹50 crore and concludes no master file filing is required. Part A is mandatory for all constituent entities regardless of transaction volume or group revenue. Non-filing of Part A is treated identically to non-filing of Part B for penalty purposes under Section 271AA(2): ₹5,00,000 flat.

Missing the Form 3CEAB 30-day deadline. Multi-entity groups frequently leave the designation exercise to November, by which point the 31 October deadline for Form 3CEAB has passed. Once the window closes, each entity must file its own complete Part B independently. For a group with three Indian constituent entities, that means three separate Part B filings, each requiring the full group-level disclosure, rather than one coordinated filing by the designated entity.

Filing a placeholder or estimated CbCR to meet the deadline, then amending. The ₹5,00,000 penalty for an inaccurate CbCR under Section 271GB(3) is a fixed penalty entirely separate from the delay penalties. A CbCR filed on time with incorrect or placeholder data does not avoid the inaccuracy penalty. The delay penalties (₹5,000 to ₹50,000 per day) apply to late filing. The ₹5,00,000 inaccuracy penalty applies to wrong data in a timely filing. A late and inaccurate CbCR attracts both. Amending after the due date also triggers scrutiny about what changed and why.

Assuming the US CbCR filing discharges all India obligations without filing Form 3CEAC. US parent groups that file CbCR in the US under domestic US rules often assume this discharges all India obligations. Form 3CEAC is a mandatory intimation that every Indian constituent entity of a non-Indian-parent group must file, regardless of where the CbCR is actually filed. India receiving the CbCR through bilateral exchange does not waive the intimation obligation. Every Indian CE must file its own Form 3CEAC.

Not monitoring CbCR exchange status annually. India’s bilateral CAA network is not static. A CAA active in FY 2023-24 is not guaranteed to remain active in FY 2025-26. CBDT has issued systematic failure notifications for specific jurisdictions in prior years. The exchange-status check must be a recurring annual item at the start of each financial year, not a one-time check performed when the compliance programme was first set up.

Using the current year’s consolidated revenue to check the CbCR threshold. The ₹6,400 crore threshold is assessed against the preceding accounting year’s consolidated revenue. A group that checks its own current-year revenue and concludes it is below the threshold misses its obligation if the prior year was above ₹6,400 crore. The preceding-year test is explicit in Rule 10DB(3) and Rule 124(3).

Filing Form 3CEAD without Form 3CEAE in a multi-entity secondary mechanism situation. When the secondary mechanism applies and more than one Indian CE exists, one entity is designated to file Form 3CEAD. Filing the CbCR without also filing Form 3CEAE to notify DGIT-RA of the designation leaves the authority without confirmation of which entity is the reporting entity and may prompt simultaneous notices to all Indian CEs.

Frequently asked questions

Q: Does the ₹500 crore master file threshold apply to the Indian entity’s own revenue or the group’s consolidated revenue?
A: The threshold applies to the international group’s consolidated revenue as reported in its consolidated financial statements. The Indian entity’s own revenue is not the relevant figure. The Indian entity triggers Part B when the group’s consolidated revenue exceeds ₹500 crore and the Indian entity’s intercompany transaction value exceeds ₹50 crore (or ₹10 crore for intangibles).

Q: If the Indian entity has intangible-related transactions of only ₹8 crore but total international transactions of ₹55 crore, is Part B required?
A: Yes. The intangible threshold of ₹10 crore is an alternative trigger to the ₹50 crore general threshold. If total international transactions exceed ₹50 crore, Part B is required regardless of whether the intangible sub-threshold is separately crossed. The ₹10 crore intangible-specific threshold matters only when the general ₹50 crore threshold is not crossed but the intangible transactions alone exceed ₹10 crore.

Q: How does the CbCR due date work for a UK-headquartered group with a December year-end?
A: The CbCR must be filed within 12 months of the end of the reporting accounting year. For a group with a 31 December year-end, the CbCR for the year ended 31 December 2025 is due by 31 December 2026. Form 3CEAC (the intimation by Indian CEs of the non-resident parent) must be filed at least two months before the CbCR due date, i.e., by 31 October 2026.

Q: Can the Indian entity use its own functional currency to prepare the CbCR?
A: The CbCR must be prepared in the group’s functional currency as used in the consolidated financial statements. If the group reports in USD, the CbCR data is reported in USD. India’s Form 3CEAD does not require conversion to INR.

Q: What happens if the parent entity’s country has a treaty with India but no specific CbCR exchange arrangement?
A: A general double taxation avoidance agreement (DTAA) does not by itself create a CbCR exchange obligation. The bilateral Competent Authority Agreement for CbCR exchange is a separate arrangement. If only a DTAA exists but no CAA for CbCR, India will not receive the CbCR through automatic exchange. The secondary mechanism applies, and the Indian CE must file Form 3CEAD directly.

Q: Is the master file the same as the “group profile” section of the TP study report?
A: No, though they cover overlapping ground. The group profile in a local file TP study is typically a brief section covering the group’s business overview and supply chain. The master file (Part B) is a comprehensive standalone document that includes intangible property analysis, intercompany financing structures, FAR analysis for all significant contributors, and group financial statements. Many Indian TP study reports include a condensed group profile that would be inadequate as a Part B master file.

Q: If the parent entity has filed the CbCR in its home jurisdiction, can the Indian entity simply submit a copy?
A: No. Form 3CEAC is an intimation that notifies DGIT-RA of where the CbCR has been filed and whether India can access it through exchange. It is not a copy of the CbCR. If the secondary mechanism applies and Form 3CEAD must be filed in India, the Indian entity must prepare and file the complete CbCR data locally; submitting a copy of the parent’s filing does not satisfy the Indian statutory requirement.

Q: Does Form 3CEAB need to be filed every year or only once?
A: Form 3CEAB must be filed every year in which the designation is exercised. It is not a one-time filing. Each year, the designated entity must file Form 3CEAB at least 30 days before the Form 3CEAA due date to preserve the designation for that year.

Q: What are the information security considerations for CbCR data?
A: India has committed to the OECD’s confidentiality and appropriate use requirements for CbCR data. CbCR information exchanged under bilateral CAAs is restricted to tax risk assessment purposes. However, India’s domestic provisions (Section 286) do not restrict what the DGIT-RA can do with CbCR data received through direct filing by an Indian entity under the secondary mechanism, and there have been instances of CbCR data being referenced in TP audit show-cause notices.

Q: Does a DPIIT-recognised startup need to file master file and CbCR?
A: DPIIT recognition under Section 80-IAC does not create any exemption from master file or CbCR obligations. If the DPIIT-recognised entity is a constituent entity of an international group that meets the relevant thresholds, the filing obligations apply in full. Startup status is relevant for income tax holiday benefits, not for international documentation compliance.

Q: Under the new Income-tax Act 2025, are any new disclosures required in the master file?
A: The Income-tax Act 2025 and the Income-tax Rules 2026 recodify the master file obligation without adding substantive new disclosure requirements to the document itself. The form numbers have changed (Form 3CEAA to Form 56, Form 3CEAB to Form 57) and the legal anchors have moved (Section 92D to Section 171, Rule 10DA to Rule 123). The prescribed content of the master file is substantively unchanged.

Q: What level of detail is required in the FAR analysis within the master file?
A: Rule 10DA(1)(f) requires the master file to contain an overview of the international group’s supply chain including which entities perform significant functions, and Rule 10DA(1)(n) requires a FAR analysis for entities contributing 10% or more of group revenue, assets, or profits. The 10% threshold means the master file must analyse more entities in detail than a global OECD-template master file typically would. For a group where the Indian manufacturing entity contributes 15% of group revenue, a full FAR analysis of that entity is mandatory in the Part B master file.

Q: Can master file and CbCR penalties be contested?
A: Yes. Penalties under Section 271AA(2) for master file non-filing and under Section 271GB for CbCR non-filing are subject to the standard appeal mechanism: application to the Commissioner of Income Tax (Appeals) and, further, to the Income Tax Appellate Tribunal (ITAT). However, the Assessing Officer or DGIT-RA must first issue a show cause notice before levying the penalty, and the taxpayer has an opportunity to demonstrate reasonable cause.

Regulatory references:

• Section 92D, Income-tax Act, 1961 (master file obligation for constituent entities)
• Section 171, Income-tax Act, 2025 (recodified master file obligation)
• Section 286, Income-tax Act, 1961 (CbCR obligation)
• Sections 510-512, Income-tax Act, 2025 (recodified CbCR obligation)
• Rule 10DA, Income-tax Rules, 1962 (master file rules: content and procedure)
• Rule 123, Income-tax Rules, 2026 (master file rules from Tax Year 2026-27)
• Rule 10DB, Income-tax Rules, 1962 (CbCR rules: threshold, filing, and procedure)
• Rule 124, Income-tax Rules, 2026 (CbCR rules from Tax Year 2026-27)
• Notification No. 31/2021 dated 05/04/2021 (CBDT: amendment to Rules 10DA and 10DB; CbCR threshold updated to ₹6,400 crore; master file designation extended to any Indian CE regardless of residential status)
• CBDT Notification dated 31/10/2017 (notification of final Rules 10DA and 10DB, and Forms 3CEAA-3CEAE)
• Section 271AA(2), Income-tax Act, 1961 (₹5,00,000 penalty for failure to furnish master file)
• Section 442(2), Income-tax Act, 2025 (same penalty preserved)
• Section 271GB, Income-tax Act, 1961 (graduated daily penalty for CbCR non-filing; ₹5,00,000 for inaccurate CbCR)
• Section 459, Income-tax Act, 2025 (same CbCR penalty structure preserved)