Contemporaneous Documentation: The 30-Day Rule in India

Definition

Contemporaneous documentation is transfer pricing documentation created at the time of the transaction — in Indian practice, maintained before the due date of the return of income for the year — rather than reconstructed after a notice arrives. It is the documentation the penalty protections attach to: section 271AA’s 2% penalty for non-maintenance is avoidable where the documentation existed contemporaneously and is produced when asked.

The 30-day rule is the mechanism: where the Transfer Pricing Officer serves the notice under section 282BC requiring the documentation, producing the contemporaneous documentation within 30 days of the notice keeps the penalty off the table. The window is short, it starts at service, and it assumes the file already exists.

Why contemporaneity is the standard

A document written in April about a transaction priced in March carries the facts of the examination in it — the TPO’s questions are the outline. A document written in the year the transaction happened carries the facts of the business. The law draws the line at the return due date because that is the last moment the taxpayer still controlled the narrative: before the filing, the documentation is evidence of how the price was decided; after a notice, it is an explanation of how it will be defended.

Example

A firm finishes its Rule 10D documentation in May — after the 31 July return due date has passed, following a s.282BC notice. The documentation is substantively correct. It is not contemporaneous: the s.271AA penalty is available, and the 30-day production window is the only protection left. The same file, finished in June of the same year, had the protection.

See also

• Rule 10D — what the documentation must contain
• Local File
• The India compliance calendar

FAQ

What exactly must exist by the due date? The Rule 10D documentation as a whole — including the benchmarking for the year. The benchmarking re-run that feeds it must therefore finish before the due date, not in response to a notice. Firms that schedule the re-run for the filing month are building their documentation in the window it should already have survived.

Does “contemporaneous” mean the document must be dated that year? Practically, yes — the documentation is the year’s work product, drawn from the year’s records. A document that post-dates the return due date and references a post-notice examination is contemporaneity-failed regardless of what its cover page says.