As per Section 195 of Income tax Act, 1961, every person liable for making a payment to non-residents shall deduct TDS from the payments made to non-residents if such sum is chargeable to Income tax then the withholding tax need to be deducted and form 15CA and 15CB are the declaration for the same.
The purpose of the forms is to collect taxes at the stage when the remittance is made as it may not be possible to recover the tax at a later stage from the non-residents.
A person making the remittance (a payment) to a Non-Resident or a Foreign Company has to submit form 15CA. This form is submitted online.
The income tax return filing has revised the rules relating to the preparation & submission of Form 15CA and Form 15CB.
Applicability:
Form 15CA is a declaration by any person intending to make a remittance:
- To non-resident or to foreign company (irrespective of whether remittance is subject to tax)
- By remitter who can be resident /non-resident/ domestic company/foreign company
- When income accrues/ arises/ received or is deemed to accrue/ arise/ received in India (Section 5 of Income Tax Act).
Form 15CB is a certificate required to be filed by the Chartered Accountant when remittance is made
- to non-resident or foreign company is taxable and
- the payment exceeds Rs. 5,00,000/-; and
- when the order/ certificate has not been received from the Assessing Officer (AO).
Non – Applicability of Form 15CA:
- When the remittance made is as per the specified list of payments in Rule 37BB of IncomeTaxRules.
Not applicable to an individual who does not require RBI approval as per Section 5 of the Foreign Exchange Management Act, 1999.
Non – Applicability of Form 15CB:
- When the remittance is not taxable.
- If the income is taxable in the country of residence of the remittee.
- When the aggregate of remittances during the financial year does not exceed Rs. 5,00,000.
Rule 37BB
| 1 | Indian investment abroad -in equity capital (shares) |
| 2 | Indian investment abroad -in debt securities |
| 3 | Indian investment abroad-in branches and wholly owned subsidiaries |
| 4 | Indian investment abroad -in subsidiaries and associates |
| 5 | Indian investment abroad -in real estate |
| 6 | Loans extended to Non-Residents |
| 7 | Advance payment against imports |
| 8 | Payment towards imports-settlement of invoice |
| 9 | Imports by diplomatic missions |
| 10 | Intermediary trade |
| 11 | Imports below Rs.5,00,000-(For use by ECD offices) |
| 12 | Payment- for operating expenses of Indian shipping companies operating abroad. |
| 13 | Operating expenses of Indian airline companies operating abroad |
| 14 | Booking of passages abroad -Airline companies |
| 15 | Remittance towards business travel. |
| 16 | Travel under basic travel quota (BTQ) |
| 17 | Travel for pilgrimage |
| 18 | Travel for medical treatment |
| 19 | Travel for education (including fees, hostel expenses etc.) |
| 20 | Postal Services |
| 21 | Construction of projects abroad by Indian companies, including import of goods at project site |
| 22 | Freight insurance – relating to import and export of goods |
| 23 | Payments for maintenance of offices abroad |
| 24 | Maintenance of Indian embassies abroad |
| 25 | Remittances by foreign embassies in India |
| 26 | Remittance by non-residents towards family maintenance and savings |
| 27 | Remittance towards personal gifts and donations |
| 28 | Remittance towards donations to religious and charitable institutions abroad |
| 29 | Remittance towards grants and donations to other Governments and charitable institutions established by the Governments. |
| 30 | Contributions or donations by the Government to international institutions |
| 31 | Remittance towards payment or refund of taxes. |
| 32 | Refunds or rebates or reduction in invoice value on account of exports |
| 33 | Payments by residents for international bidding. |
Various parts of Form 15CA
Part A – Section A of Form 15CA is filled in by the remitter when the payment or the total sum of the payment extended by the remitter to NRI recipient during a particular Financial Year is Rs. 5 Lakhs or less.
Part B – Section B of Form 15CA is in the role when such payments are more than Rs. 5 Lakhs. Information is entered by the filer in Section B after acquiring a certificate from the Assessing Officer (valid under Section 197) or the order from the Assessing Officer (valid under sub-section (2) or sub-section (3) of Section 195).
Part C – If such payments made during a particular FY exceed Rs. 5 Lakhs, the tax rates and income tax exemptions information has to be entered in Section C of Form 15CA after acquiring the Tax Determination Certificate or Form 15CB from authorized CA (valid under sub-section (2) of section 288).
Part D – Payments made by the remitter during a particular FY which is not referred to in sub-section 37BB or in other words is not taxable under law, the information related to such payments is to be entered in Section D of Form 15CA.
Guidelines for filing Form 15CA
Form 15CA is available online on the government’s official income tax portal. The form is electronically submitted.
Here is the step-wise guidance to file Form 15CA:
Step 1 Log in to the official E-filing portal at https://incometaxindiaefiling.gov.in/ by using the valid credentials.
Step 2– Select ” E-file” from the menu and then click on Income Tax Forms.
Step 3– The taxpayer’s PAN details are pre-filled. Choose “Form 15CA”
Step 4– Select your required section from “Select a relevant part from the down “
Step 5– Fill the selected part among four parts of Form 15CA and click on the “submit” button.
Step 6– Fill in the details in the verification portion of the respective part of Form 15CA.
Please Note– Form 15CB needs to be uploaded before you fill Part C of Form 15CA as the acknowledgment number of Form 15CB is required while filing the respective part.
Once the form is successfully filled out, a notification “successfully submitted” will appear, and a confirmation email will be sent to the registered email account.
Form 15CB
Form 15CB liability can be ascertained and certified by obtaining the Certificate from a Chartered Accountant in Form no. 15CB.
This certificate has been prescribed under Section 195(6) of the Income-tax Act and is an alternate option for obtaining Tax clearance apart from a Certificate from the Assessing Officer.
Chartered Accountants can fill in Form 15CB through the below-mentioned procedure:
Step 1: In the Income-tax portal, click on the “Downloads” tab.
Step 2: Select the required “Forms (Other than ITR)”
Step 3: Create the XML file using the Excel/java chosen utility.
Step 4: Login to the account( CA ACCOUNT) on the e-filing portal and click on the “e-File” tab. Select “Upload Form” from the drop-down menu.
Step 5: Fill in the PAN/TAN details of the assessee, PAN of C.A., select “Form Name” as “15CB“, and “Filing Type” as “Original”. Press ‘submit’
As soon as you press the submit button success notification pop up ,and email will besent to registered email ID.
Note: A Digital Signature Certificate is the crucial document while filing Form 15CB
