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FILING OF FORM 15CA & 15CB IN CASE OF REMITTANCE(S) TO THE NON-RESIDENTS

Nowadays, trade is not limited to one own’s country only. But in this globalised economy, it is very easy to trade with different countries. And with the help of digital net banking, it is also very easy to settle the payment for the trade or services provided between different nations.

As per the Indian Income Tax Act, any payment/services on which TDS is applicable, the payment to the party should be done after deducting TDS.

If any payment is made outside India, then there is one problem that the tax cannot be collected from them at a later stage.  Therefore, to track this type of transaction, where any payment is made to the Non – Residents, filing of Form 15CA and 15CB introduced.

As per Section 195 of Income Tax Act, 1961 which mandates the deduction of Income Tax from payments made to Non-Resident. The person who is making the remittances (Remitter) to the non-resident needs to furnish an undertaking in Form 15CA accompanied by a Chartered Accountants Certificate in Form 15CB.

WHAT IS FORM 15CA?

Form 15CA is a type of declaration of remitter, in which remitter gives the information about his organisation and bank details through which the payment is being remitted. It also contains the information for nature of payment and what amount in Foreign Currency is being remitted. Also, remittee (Non-Resident) details are mentioned in this Form.

When a person desires to remit any money to non-resident, the bank do check whether the tax was paid or not. If tax is not paid in the form of TDS, it will be checked if it is certified by the Chartered accountant or the Assessing Officer. Bank asks for Form 15CA/15CB as a document of genuine transactions.

The furnishing of information Form 15CA has been classified into 4 parts –

PART A: – If the remittances is chargeable to tax under Income Tax Act, 1962 and the remittance or the aggregate of such remittance does not exceed Rs. 5 Lakh during the Financial Year.

PART B: – Where remittance is chargeable to tax and the remittance or the aggregate of remittances exceeds Rs. 5 Lakh during the financial year and an order/certificate u/s 195(2)/ 195(3)/197 of Income Tax Act has been obtained from the Assessing Officer.

PART C: – Where remittance is chargeable to tax and the remittance or the aggregate of remittances exceeds Rs. 5 Lakh during the financial year and a certificate in Form No. 15CB has been obtained.

PART D: – Where the remittance is not chargeable to tax under Income Tax Act, 1961.

WHAT IS FORM 15CB?

Form 15 CB (Certificate of an accountant) is a Form which is required to be signed by a Chartered Accountant. This is a kind of certification in which remitter & remittee personal information is mentioned. This certificate also mentioned the Nature of Transaction, Amount of Remittance (in Foreign Currency & INR), TDS rates.

Form 15CB is the certificate where the CA Examines the remittance chargeability as per the provisions under Section 5 and 9 of the Income Tax Act along with the provisions of the Double Tax Avoidance Agreements.

Upload of Form 15CB is mandatory to file Part C of Form 15CA. To prefill the details in Part C of form 15CA, the Acknowledgement Number of e- verified form 15CB should be verified.

EXEMPTION TO PAYMENT/REMITTANCES, WHERE FORM 15CA & 15CB IS NOT REQUIRED?

Individual don’t need to furnish the information in Form 15CA and 15CB for remittance which requires no RBI approval.

As per Rule 37BB following is the List of payments (33 items) which does not require compliances and reporting through the submission of 15CA and 15CB: –

Nature of Payment Purpose code as per RBI
Indian investment abroad – in equity share capital S0001
Indian investment abroad – in debt securities S0002
Indian investment abroad – in  wholly owned subsidiaries or branches S0003
Indian investment abroad – in subsidiaries and associates S0004
Indian investment abroad – in real estate S0005
Loans extended to Non-Residents S0011
Advance payment against imports S0101
Payment towards imports- settlement of invoice S0102
Imports by diplomatic missions S0103
Intermediary trade S0104
Imports below Rs.5,00,000- (For use by ECD offices) S0190
Operating expenses of Indian shipping companies operating abroad. S0202
Operating expenses of Indian Airlines companies operating abroad S0208
Booking of passages abroad -Airlines companies S0212
Remittance towards business travel. S0301
Travel under basic travel quota (BTQ) S0302
Travel for pilgrimage S0303
Travel for medical treatment S0304
Travel for education (including fees, hostel expenses etc.) S0305
Postal Services S0401
Construction of projects abroad by Indian companies and also including import of goods at project site S0501
Freight insurance in relate import and export of goods S0602
Payments for maintenance of offices abroad S1011
Maintenance of Indian embassies abroad S1201
Remittances by foreign embassies in India S1202
Remittances for family maintenance and savings by the non-residents S1301
Remittance towards personal gifts and donations S1302
Remittances towards donations to religious and charitable institutions abroad S1303
Remittances to other Governments and charitable institutions established by the Governments as grants and donations S1304
Remittances towards Contribution or donations by the Government to international institutions S1305
Remittances for payment or refund of taxes. S1306
Rebates or Refunds or reduction in invoice value on account of exports S1501
Payments by residents for international bidding. S1503

You can also read my coming suggested related articles on:-

  • Procedure of filing of Form 15CA & 15CBs.
  • How to create DSCs Files and UDIN Generation.
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