Truecaller under IT dept investigation for transfer pricing violations: Report

The Income Tax Department of India (IT) has started an investigation into calling ID and spam caller blocking application Truecaller over an alleged violation of transfer pricing regulation action, reported the news portal India Today on Thursday, November 7. 

IT department officials have conducted raids at Truecaller's offices and other premises linked to the app in Gurugram and a few other places, as per the report.

Truecaller has not responded to the development, as per the news portal. 

The application has over 400 million active users in India. The app also launched a new feature in India, which was Truecaller Fraud Insurance, which aims to offer additional protection to people enrolled in the premium subscribers in case people fall victim to fraud.

The calling ID and spam caller blocking application Truecaller partnered with HDFC Ergo for the provision of the services. As such scams are on the rise, Truecaller said that the new feature will actually help users who have fallen victim to online scams, reported the news portal. 

In response the company said, “Truecaller is currently assisting the authorities to the full extent at our offices. This came without prior notice and Truecaller is currently awaiting official confirmation and communication from the tax departments,” reported the news agency ANI.

“This is not an uncommon practice and Truecaller will cooperate fully with the relevant authorities,” they said. The company also said that Truecaller is not subject to any tax investigation in India outside of the routine tax audits. 

“As has been previously communicated, Truecaller's transfer pricing policy for its intra-group transactions is consistent with the internationally accepted arm's length standard. The purpose is to ensure that Truecaller pays tax in a way that is correct from the perspective of both the Swedish and the Indian tax authorities. The policy is continuously independently reviewed to ensure that it meets the tax law requirements of both countries,” they said as per the agency report.