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.)|
|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|
Payments by residents for international bidding”.
Necessary information that a client must provide in order to submit Forms 15CA and 15CB
- Name of the remitter
- Address of the remitter
- PAN of the remitter
- Main place of business of the remitter
- E-Mail address and phone number of the remitter
- Remitter Status (firm/company/other)
- Remittee’s name and status
- Remittee’s address
- Remittee’s country (country to which remittance is paid)
- Remittee’s principal place of business
- The country to which the remittance is made
- The currency in which the transfer is made
- The amount of the remittance in Indian currency
- The proposed date of the remittance
- The nature of the remittance according to the agreement (invoice copy to be asked from client)
Remitter’s bank information
- The remitter’s bank’s name
- The bank’s branch name
- The bank’s BSR code
- The signing person’s father’s name
- The signing person’s designation
Papers from the remittance committee
- Form 10F, properly completed by the remittee’s authorized representative.
- Remittee’s tax residence certificate (tax registration of the country in which remittee is registered).
- A certificate stating that the remittee has no permanent establishment in India.
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