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 hands of non-resident. This is a better system for Income tax department for tracking changes on the remittances. Banks also ensure such forms are received by banks before remittance is effected as per the revised Rule 37BB. There is an obligation to furnish Form 15CA received from remitter to income tax authority for the purposes of any proceeding under the act.
Form 15CB: Form 15CB is a certificate which is an alternate channel of obtaining Tax clearance other than from Certificate from Assessing officer. The form is prescribed in section 195(6) of the income tax act.
Documents which are required to get Form 15CA and Form 15CB issued by a CA:
- PAN of Remitter
- Invoice for which the payment is made
- Bank account details from which payment is made
- BSR code of the bank from which payment is made
- Digital signature of Remitter
Changes in Rules
Form 15CA and Form 15CB need not be furnished by an individual for remittance which do not require RBI approval.
- The list of remittance of specified nature which do not require submission of Form 15CA and Form 15CB as per Rule 37BB, is extended.
- The payments which are above Rs.5,00,000 and are also taxable only require submission of Form 15CB.
Different parts of the Form 15CA are for different remittances i.e:
Part A: The remittance does not exceed Rs.5,00,000 during the financial year and the remittance is chargeable to tax as per the provisions of the income tax act.
Part B: The remittance does not exceed Rs.5,00,000 during the financial year and the it is chargeable to tax under provisions of act and an order/ certificate u/s 195(2) or 195(3) or 197 of the income tax act has been obtained from the assessing officer.
Part C: The remittance exceeds Rs.5,00,000 during the financial year and it is chargeable to tax under the provisions of the act and a certificate in Form 15CB from CA has been obtained.
Part D: The remittance is not chargeable to tax under the provisions of the act [payments other than referred in Rule 37BB(3)]
Points to be remembered:
- The rules regarding submission of Form 15CA and Form 15CB are revised. These revised rules are effective from 01 April 2016
- Form 15CA and Form 15CB both are to be filed electronically
- There is penalty of Rs.1,00,000 for each default of non-filing.
- There is option for withdrawal of Form 15CA before payment i.e within 7 days of submission of the Form online.
Provisions of Rule 37BB
As per Rule 37BB, the person responsible for paying to a non-resident or to a foreign company has to furnish following details:
When payment is up to Rs.5,00,000
For all such remittances, information in Part A of Form 15CA is required.
When payment exceeds Rs.5,00,000
The information in Part B of the Form 15CA is required but after obtaining:
- A certificate from Assessing officer under section 197
- An order from Assessing officer under section 195(2) or 195(3)
Information in Part C of the Form 15CA is required after obtaining
- Certificate in Form 15CB from a CA
When the payment is not chargeable to tax under income tax act
Information in Part D of the Form 15CA is required.
As per Rule 37BB(3), No information in any Form is required to be furnished in case the remittance is made by an individual and does not require prior approval of RBI (as per section 5 of FEMA,1999) or in case the payment made is of any of the following nature:
Nature of Remittance
- Indian investment abroad – in equity capital (shares)
- Indian investment abroad – in debt securities
- Indian investment abroad- in branches and wholly owned subsidiaries
- Indian investment abroad – in subsidiaries and associates
- Indian investment abroad – in real estate
- Loans extended to Non-Residents
- Advance payment against imports
- Payment towards imports- settlement of invoice
- Imports by diplomatic missions
- Intermediary trade
- Imports below Rs.5,00,000- (For use by ECD offices)
- Payment- for operating expenses of Indian shipping companies operating abroad.
- Operating expenses of Indian Airlines companies operating abroad
- Booking of passages abroad -Airlines companies
- Remittance towards business travel.
- Travel under basic travel quota (BTQ)
- Travel for pilgrimage
- Travel for medical treatment
- Travel for education (including fees, hostel expenses etc.)
- Postal Services
- Construction of projects abroad by Indian companies including import of goods at project site
- Freight insurance – relating to import and export of goods
- Payments for maintenance of offices abroad
- Maintenance of Indian embassies abroad
- Remittances by foreign embassies in India
- Remittance by non-residents towards family maintenance and savings
- Remittance towards personal gifts and donations
- Remittance towards donations to religious and charitable institutions abroad
- Remittance towards grants and donations to other Governments and charitable institutions established by the Governments.
- Contributions or donations by the Government to international institutions
- Remittance towards payment or refund of taxes.
- Refunds or rebates or reduction in invoice value on account of exports
- Payments by residents for international bidding.
About the Author
Arpit Goyal is pursuing CA and B.com & also working as an article assistant in Gurgaon. He has an immense interest in Taxation. He loves to use technology to spread knowledge about taxation & accounts.