The tax department has entered into two unilateral advance pricing agreements (APAs) with Indian taxpayers as it looks to reduce litigation by providing certainty in transfer pricing.

The APAs pertain to information technology and banking and finance sectors. The international transactions covered in these agreements include software development services, IT- enabled and KPO services.

With these, the total number of APAs entered into by the CBDT has reached 154, which includes 11 bilateral APAs and 143 unilateral APAs.

"The CBDT expects more APAs to be concluded and signed in the near future. The approach and functioning of the officers in the APA teams have been appreciated and acknowledged by the industry in India and abroad," an official statement said.

The APA scheme was introduced in the Income-tax Act in 2012 and the 'Rollback' provisions in 2014.

The scheme endeavours to provide certainty to taxpayers in the domain of transfer pricing by specifying the methods of pricing and setting the prices of international transactions in advance.

Furthermore, the taxpayer has the option to roll back the APA for four preceding years. Since its inception, the APA scheme has stirred tremendous interest among MNCs, which has resulted in more than 800 applications -- both unilateral and bilateral -- having been filed in just five years, the statement added.