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Form 15CA and Form 15CBss

Form 15CA and Form 15CB are tax documents used when sending money abroad. Form 15CA is a declaration you file online about the payment, while Form 15CB is a certificate from a chartered accountant. These forms help the government track foreign payments and ensure proper taxes are paid. An income tax calculator can help estimate related tax implications.

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Form 15CA and Form 15CBss

All About Form 15CA and Form 15CB

All About Form 15CA and Form 15CB
July 26, 2024

Table of Content

 

  • When a person makes any payment or remit any money to non resident, the bank will need to check whether the tax was paid or not
  • There are at least 28 types of foreign remittances where you do not require any submission of Form 15CA or Form 15CB
  • If the remittance or the aggregate of remittances is not higher than Rs 5 lakh in a particular financial year, you need to fill Form 15CE

Foreign remittances have tax implications, which many times is missed out inadvertently by taxpayers.

As per section 195 of the Income Tax Act, tax is required to be deducted for any sum which is taxable under the Income Tax Act. So when a person desires to make any payment or remit any money to non resident, the bank will require to check whether the tax was paid or not. If not paid; it will be checked if  it is certified by the Chartered accountant or the Assessing Officer. But there are at least 28 types of foreign remittance where you do not require any submission of Form 15CA or Form 15CB.

What is Form 15CA?

Form 15CA is a declaration of remitter and is used as a tool for collecting information in respect of payments which are chargeable to tax in the hands of recipient non-resident. This is starting of an effective Information Processing System which may be utilized by the Income Tax Department to independently track the foreign remittances and their nature to determine tax liability.

Authorised Dealers/ Banks are now becoming more vigilant in ensuring that such Forms are received by them before remittance is affected, since now as per the revised Rule 37BB, a duty is casted on them to furnish Form 15CA (received from the remitter) to an income-tax authority for the purpose of any proceedings under the Income-tax Act.

Income Tax Department has now created online facility to file information. Thus the Form 15CA is  required to be filed online with the tax department. After that, proof of online submission should be printed out. This copy is required to be given to the Bank as a proof of tax clearance from the tax department.

What is Form 15CB?

Form 15 CB is Form which is required to be signed by a Chartered Accountant. This is a kind of certification regarding rates and right kind of tax paid by you. Certain details are required from Form 15CB at the time of filing Form 15CA.

At first glance it appears that Form 15CA is not required to be filled if the remittance or payment to non-resident Indian is not chargeable to tax.

As per Income Tax (Fourteenth Amendment) Rules, 2013, No reporting in Form 15CA and 15CB is to be made in case of the following nature of foreign remittances since October 2013 has been provided in Rule 37BB.

Applicability of Form 15CA and Form 15CB

Form 15CA and Form 15CB are required when you make foreign remittances under the Income Tax Act, 1961. Which of the forms needs to be used depends on the nature of foreign remittance and the amount you wish to remit. While you gather information regarding how to file returns online, it’s important to understand the applicability of these forms as well.

Form 15 CA

Form 15CA is an online remitter’s declaration that states any payment made outside Indiahas been subject to tax in India.

  • Purpose: To track foreign remittances/payments and ensure that the remitter is paying taxes according to the provisions of the Income Tax Act.
  • Types of Payments for which it is required: Various types of payments made to non-residents, such as royalties, dividends, interest, salary, professional fees, technical fees, etc.

Applicability of Form 15CA

  • Form 15CA is applicable for a payment to a non-resident or a foreign company, irrespective of whether the remittance is subject to tax.
  • The remitter can be a resident or non-resident individual, a domestic or a foreign company.
  • In accordance to the regulations in Section 5 of the Income Tax Act, 1961, when the income arises, accrues, is received or is deemed to accrue, arise or be received in India, the declaration is needed in Form 15CA.

Form 15 CA consists of 4 parts

PART A

 

To be filled for taxable remittances upto Rs 5 lakhs.

PART B

 

To be filled fortaxableremittances exceeding Rs. 5 Lakhsand an order/Certificate under Section 195(2)/195 (3)/197 of the Income Tax Act has been obtained from the Assessing Officer.

 

PART C

 

To be filled for taxableremittances exceeding Rs. 5 Lakhsalong with a certificate in Form 15 CB is received from a chartered accountant.

 

PART D

 

To be filledwhen the payment made to the NRI is not chargeable to tax under the IT Act of 1961

When is Form 15CA not required?

1. Form 15CA is not required when the remittance is made per the specified payment list in Rule 37BB of Income Tax Rules.

2. When the individual making the remittance does not require prior approval of RBI according to Section 5 of the Foreign Exchange Management Act (FEMA), 1999.

Form 15CB

Form 15CB is a certificate issued by a Chartered Accountant (CA) u/s 195(6) that ensures that the provisions of the Double Taxation Avoidance Agreement and the Income Tax Act have been complied with in respect of tax deductions while making the payments

  • Purpose: The certificate issued by the CA serves as evidence that the payment is in accordance with the applicable tax laws and helps in avoiding any potential tax disputes or penalties

Applicability of Form 15CB

  • To make the remittance, Form 15CB needs to be filed by a Chartered Accountant (CA).
  • The form is required when the remittance to a non-resident or a foreign company is taxable.
  • When the amount of remittance exceeds Rs 5 lakh.
  • When there’s no order from the Assessing Officer (AO).

When is Form 15CB not required?

1. Form 15CB is not required when the remittance is not taxable in India.

2. If the remittee's country of residence considers the income taxable and the remittance is sent to that country.

3. Form 15CB is not required where "Part-A" of Form 15CA is to be filled in, i.e. in case payments does not exceed Rs Five Lakhs during the financial year.

4. When an individual makes the remittance and is not for a foreign tour or payment for the purchase of any foreign asset, the amount does not exceed the limit prescribed by the RBI.

5. When an individual makes the remittance to pursue education abroad, the amount does not exceed the limit prescribed by the RBI.

6. Form 15CB is not required where a certificate from the AO u/s 197 or 195(2) / (3) has been obtained

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”.

Mandatory information required by a client to file a Form 15CA and 15CB

Details of Remitter

a. Name of the remitter

b. Address of the remitter

c. PAN of the remitter

d. Principal place of business of the remitter

e. E-Mail address and phone no. of remitter

f. Status of the remitter (firm/company/other)

Details of remittee

a. Name and status of the remittee

b. Address of the remittee

c. Country of the remittee (country to which remittance is made)

d. Principal place of the business of the remittee

Details of the remittance

a. Country to which remittance is made

b. Currency in which remittance is made

c. Amount of remittance in Indian currency

d. Proposed date of remittance

e. Nature of remittance as per agreement (invoice copy to be asked from client)

Bank details of the remitter

a. Name of bank of the remitter

b. Name of branch of the bank

c. BSR Code of the bank

Others

a. Father’s name of the signing person

b. Designation of the signing person

Documents from the remittee

a. Form 10F duly filled by the authorized person of the remittee.

b. Tax residency certificate from the remittee (tax registration of the country in which remittee is registered).

c. Certificate that the remittee does not have any permanent establishment in India.

Procedure to File Form 15CA and 15CB Online

While you learn how to file ITR online via the e-filing portal, it’s crucial to understand the process of filing Form 15CA and Form 15CB as well. These are essential when you make a foreign remittance. Here’s a step-by-step guide to file Form 15CA and Form 15CB.

How to e-file Form 15CA?

  • Click the e-File tab, select ‘Income Tax Returns’ and choose the ‘File Income Tax Forms’ option.
  • On the new page, click on ‘Others’ and select Form 15CA. You can search for the Form from the search box too.
  • On the Instructions page, click on ‘Let’s get started’.
  • On the page ‘Information for payment to Non-resident’, enter the Filing type as ‘Original/Revised’, choose the Financial Year and click on ‘Continue’.
  • Now you need to choose your applicable option from Part A, Part B, Part C and Part D. Here Part A is meant for remittance below Rs 5 lakh in a year. Choose Part B when you have approval from the Assessing Officer (AO) under sections 195 (2), 195 (3) or 197. Part C is applicable when the annual remittance is above Rs 5 lakh and a form 15CB is required from a CA. Select Part D when the remittance is not taxable and no tax deduction is required for it.
  • For Part A, enter the remittance information comprising sender (remitter), recipient (remittee) and fund transfer (remittance) details and submit the verification thereafter. No Form 15CB is required here.
  • For Part B, furnish the details of the remitter, remittee and remittance along with the AO Order details. No need to submit Form 15CB here as well.
  • Part C requires remitter, remittee and remittance details and details of the CA. Afterwards, click on ‘Assign to CA’ and confirm by clicking on ‘Yes’. Click on ‘Pending Actions’ on the dashboard to check Form 15CB uploaded by your CA. You can choose to ‘Accept’ or ‘Reject’ Form 15CA. If you accept, complete e-Verification through a digital signature certificate (DSC) or electronic verification code (EVC).
  • In Part D, fill in the details of the remitter, remittee, and remittance details and e-Verify them through ‘Preview’. You also need to ‘Verify’ the details of the person submitting Form 15CA. Complete the e-verification through a DSC. Keep note of the transaction ID and acknowledgement numbers displayed on the screen for future reference. You will receive a confirmation message at your registered email ID and mobile number.

How to e-file Form 15CB?

  • Under the ‘My Account’ tab, furnish the details of your CA in the ‘Add CA’ option. Enter the Membership number and select the Form 15CB option.
  • The remaining part of the process has to be completed by the CA. The user account of the CA has to be registered as the CA account.
  • Download the ‘Form 15CB Utility .xml file’ from the Download page and prepare offline for uploading it.
  • On the site, click on ‘Upload Form’ and enter the details: PAN of the Assessee, PAN of the CA, Form name- 15CB and Filing Type- Original
  • Generate and upload the .xml file through Utility
  • Click on ‘Submit’
  • Once Form 15CB is uploaded by the CA, the Assessee can log in and check the status of the Form by selecting ‘For Your Information’ on the Worklist tab.
  • The status of the Form will be displayed thereafter.

Details required for filing the forms    

1. PAN of the remitter and the beneficiary

2. Amount of the remittance

3. Nature and purpose of the remittance

4. Bank details

5. Certificate from a Chartered Accountant (Form 15CB)

Specified payments where Form 15CA/15CB is not required

Form 15CA and Form 15CB are not applicable for transactions that do not necessitate RBI approval. 

FAQs about Form 15CA and Form 15CB 

Q. What is Form 15CA and Form 15CB?

A. Form 15CA and Form 15CB are two mandatory forms that need to be submitted under the Income Tax Act, 1961 for payments made to a non-resident by a resident of India. Form 15CA is the declaration made by the remitter about the foreign remittance. Whereas, Form 15CB is a declaration from the CA stating the compliance of the Income Tax Act, 1961 and the Double Taxation Avoidance Agreement. 

Q.What types of documents are required while filing of Form No. 15CA?

A. Invoice, tax residency certificate (TRC), the agreement between the parties and Form No. 10F.

Q. Is it mandatory to file Form 15CB before the filing of Form No. 15CA (Part-C)?

A. Yes, it’s mandatory to file Form 15CB, before the filing of Form no. 15CA (Part-C). This is because Part C of the e-filing of Form 15CA requires the details of Form 15CB. To ensure the pre-filling of the details, verify the acknowledgement number of the e-Verified Form 15CB. 

Q. What types of documents are required while filing Form No. 15CA?

A. Filing of Form 15CA requires submitting the details of the remitter, remittee and remittance. Also, the AO approval, Form 15CB and the details of the CA are needed in applicable situations. Thus, the PAN of the remitter, remittee and the CA the Form 15CB and the approval certificate are in the list of documents required. 

Q. What will happen in case of non-compliance with Form No. 15CA and Form No. 15CB?

A. In case of non-compliance with Form 15CA and Form 15CB, a penalty is payable under Section 271-I of the Income Tax Act, 1961. The lower of Rs 1 lakh or the remittance amount is payable as a penalty for non-filing or incorrect filing of Form 15CA and 15CB. 

Q. Who can use Form 15CB?

A. Form 15CB should be used to remit more than Rs 5 lakh in a financial year to a non-resident which is taxable and where approval from AO is not obtained. Here, a CA has to furnish Form 15CB for the Assessee. 

Q. Is it obligatory to furnish Form 15CB?

A. No, Form 15CB is not mandatory. It is an event-driven form that should only be completed when the remittance surpasses Rs. 5 lakh within a financial year, and you are mandated to provide an accountant certificate as per the provisions of Section 288 of the Income Tax Act, 1961

Q. Can Filed Form 15CA form 15CB be revised or cancelled?

A. Yes, Form 15CA can be withdrawn within 7 days from the date of Submission. The link to withdraw the submitted form will be available on the website of the Assessee concerned.

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