All About Form 15CA and Form 15CB

When a person makes a payment or remits money to a non-resident, the bank must determine whether or not the tax was paid. There are at least 28 categories of international remittances that do not need the completion of Form 15CA or Form 15CB. If the remittance or aggregate of remittances is less than Rs 5 lakh in a fiscal year, you must complete Form 15CE.

Overseas remittances have tax ramifications, which are often overlooked by taxpayers.

Tax is needed to be deducted under section 195 of the Income Tax Act for every payment that is taxable under the Income Tax Act. Hence, if a person wishes to make a payment or send money to a non-resident, the bank will need to verify whether or not the tax was paid. If it is not paid, it will be verified to see whether it has been certified by a Chartered Accountant or an Assessing Officer. Yet, there are at least 28 categories of overseas remittances that do not need the completion of Form 15CA or Form 15CB.

What exactly is Form 15CA?

Form 15CA is a declaration of remitter used to collect information about taxable payments in the hands of a non-resident recipient. This is the first step in establishing a functional information processing system that will be utilized by the Income Tax Department to independently monitor foreign remittances and their nature in order to determine tax payable.

Authorised Dealers/Banks are becoming more careful in ensuring that such Forms are received prior to remittance, since new Regulation 37BB now requires them to provide Form 15CA (received from the remitter) to an income-tax authority for the purpose of any actions under the Income-tax Act.

The Income Tax Division has recently implemented an online filing method. As a consequence, the Form 15CA must be filed to the tax department online. After that, the proof of online submission should be printed. This copy must be sent to the bank as proof of tax clearance from the IRS.

What is the meaning of 15CB?

Form 15 CB is a form that must be signed by a Chartered Accountant. This is a kind of certification indicating the rates and type of tax paid by you. Some information from Form 15CB is necessary when completing Form 15CA.

At first appearance, it seems that Form 15CA is not necessary if the transfer or payment to a non-resident Indian is not tax deductible.

According to the Income Tax (Fourteenth Amendment) Regulations, 2013, no reporting in Form 15CA and 15CB is required for the following types of international remittances from October 2013.

List of payments where Form 15CA / 15CB is not required

Purpose code as per RBI	Nature of Payment
S0001	Indian investment abroad -in equity capital (shares)
S0002	Indian investment abroad -in debt securities
S0003	Indian investment abroad -in branches and wholly owned subsidiaries
S0004	Indian investment abroad -in subsidiaries and associates
S0005	Indian investment abroad -in real estate
S0011	Loans extended to Non-Residents
S0202	Payment- for operating expenses of Indian shipping companies operating abroad.
S0208	Operating expenses of Indian Airlines companies operating abroad
S0212	Booking of passages abroad -Airlines companies
S0301	Remittance towards business travel.
S0302	Travel under basic travel quota (BTQ)
S0303	Travel for pilgrimage
S0304	Travel for medical treatment
S0305	Travel for education (including fees, hostel expenses etc.)
S0401	Postal services
S0501	Construction of projects abroad by Indian companies including import of goods at project site
S0602	Freight insurance – relating to import and export of goods
S1011	Payments for maintenance of offices abroad
S1201	Maintenance of Indian embassies abroad
S1202	Remittances by foreign embassies in India
S1301	Remittance by non-residents towards family maintenance and-savings
S1302	Remittance towards personal gifts anddonations
S1303	Remittance towards donations to religious and charitable institutions abroad
S1304	Remittance towards grants and donations to otherGovernmentsand charitable institutions established by the Governments.
S1305	Contributions or donations by theGovernmentto international institutions
S1306	Remittance towards payment orrefundof taxes.
S1501	Refunds or rebates or reduction in invoice value on account of exports
S1503	Payments by residents for international bidding”.

Necessary information that a client must provide in order to submit Forms 15CA and 15CB

Remitter Information

1. Name of the remitter
2. Address of the remitter
3. PAN of the remitter
4. Main place of business of the remitter
5. E-Mail address and phone number of the remitter
6. Remitter Status (firm/company/other)

Remittance information

1. Remittee’s name and status
2. Remittee’s address
3. Remittee’s country (country to which remittance is paid)
4. Remittee’s principal place of business

Remittance information

1. The country to which the remittance is made
2. The currency in which the transfer is made
3. The amount of the remittance in Indian currency
4. The proposed date of the remittance
5. The nature of the remittance according to the agreement (invoice copy to be asked from client)

Remitter’s bank information

1. The remitter’s bank’s name
2. The bank’s branch name
3. The bank’s BSR code

Others

1. The signing person’s father’s name
2. The signing person’s designation

Papers from the remittance committee

1. Form 10F, properly completed by the remittee’s authorized representative.
2. Remittee’s tax residence certificate (tax registration of the country in which remittee is registered).
3. A certificate stating that the remittee has no permanent establishment in India.