Truecaller is Being Investigated by the IT Department for Violations of Transfer Pricing

Nitin Konde, Varun Bhardwaj

Nov 9, 2024 — 3 min read

Transfer Pricing Violations Truecaller Investigated by IT Department

On November 7, a renowned news outlet stated in its report that the Income Tax Department of India (IT) had begun an investigation into the spam caller blocking software Truecaller and calling ID due to a suspected violation of the transfer pricing regulation action.

According to the report, Truecaller's offices and other locations connected to the app in Gurugram and a few other locations have been raided by IT department officers.

App is Very Popular in India

In India, the app has more than 400 million active users. Truecaller Fraud Insurance is a new service that the app introduced in India with the intention of providing premium customers with extra security in the event that they become victims of fraud.

Truecaller, a calling ID and spam caller blocking app, teamed up with HDFC Ergo to offer this service. Since these types of frauds are becoming more common, Truecaller stated that the new tool will truly assist consumers to protect themselves with these fake and fraud calls.

Truecaller’s Response

The corporation responded by saying that Truecaller is now fully supporting the authorities at its headquarters. This was unexpected, and Truecaller is presently awaiting formal confirmation and word from the tax authorities.

According to the company's press statement, Truecaller will fully comply with the appropriate authorities, and this is not an unusual practice. The business added that, other than regular tax audits, Truecaller is not the target of any tax investigations in India.

For its intra-group transactions, Truecaller follows the globally recognised arm's length norm for transfer pricing, as was previously stated. As far as the Swedish and Indian tax authorities are concerned, the goal is to make sure Truecaller pays taxes correctly. According to the release, the policy is regularly examined by an impartial party to make sure it complies with the requirements of both nations' tax laws.

To make sure that cross-border transactions between linked firms are carried out at market value and avoid profit shifting to lower-tax jurisdictions, the tax authorities have increased their inspection of transfer pricing legislation. To stop income leaks, the tax probes on international firms that were previously conducted to verify compliance in the tech and digital industries have been expanded.

With features like caller ID, call blocking, flash messaging, call recording, chat, and voice over the internet, the Stockholm-based startup runs a smartphone application.

The business maintained that, aside from regular tax audits, its operations are "entirely transparent" and immune to tax investigations in India.

Rishit Jhunjhunwala Has Been Appointed as the New CEO of Truecaller

Rishit Jhunjhunwala, the current chief of products, was named Truecaller's new CEO the day before the raids took place. Jhunjhunwala is the managing director of Truecaller's India division and has been with the company since 2015. On January 9, 2025, he will assume his new position following Alan Mamedi's resignation. In a letter, co-founders Alan Mamedi and Nami Zarringhalam announced their decision to leave Truecaller's operational responsibilities on June 30, 2025.