What is Form 15CA & why is it required?
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 form helps Income Tax Department in tracking foreign remittances & their taxability.
As per Rule 37BB, it is a duty of authorized dealers/banks to ensure that such forms are received by them from the remitter.
Whether Form 15CA has to be submitted in all cases since the bankers demand it invariably?
Form 15CA needs to be filled only if the remittance is chargeable to tax in India. If remittance/payment is not chargeable to NRI then Form 15CA is not required.
What stand customer can take if Bank Demand Form 15CA but service is not taxable?
In such cases, the possible recourse is to submit a declaration in form of a note to bank stating the nature of remittance and reason as to why it is not chargeable to tax and consequently exempted from the submission of Form 15CA.
What is Form 15CB & why is it required?
Chargeability can be ascertained and certified by obtaining a certificate known as Form 15BB from a Chartered Accountant.
This certificate has been prescribed under section 195(6) of the Income Tax Act and is an alternate channel of obtaining tax clearance apart from certificate from Assessing Officer.
Perusal of Form 15CB makes it clear that there is no condition or exemption to obtain such certificate when the remittance is not chargeable to tax. In fact, this Form 15CB is the Tax Determination Certificate where the Issuer CA examines the remittance having regard to chargeability provisions under section 5 and 9 of Income Tax Act along with provisions of Double Tax Avoidance Agreements with the Recipient’s Residence Country.
Therefore, in our opinion, it is advisable to obtain 15CB even in cases where 15CA is not mandated.
Though there is no penal provision prescribed in the Act if such Certificates in Form 15CB and Declaration in Form 15CA are not obtained, but it is in the interest of assesse to have a tax determination in Form 15CB from a CA, since Non-resident taxation involves various complex issues and the consequences of Non deduction are severe.
Changes in the requirement of filling the forms effective from 1st April 2016
No Form 15CA and 15CB will be required to be furnished by an individual for remittance which do not require RBI approval under its Liberalized Remmittace Scheme (LRS).
The list of payments of specified nature under Rule 37 BB where submission of Forms 15CA and 15CB is not required has been expanded from 28 to 33.
A CA certificate (Form No. 15CB in this case) will be required to be furnished only in case of payments made to non-residents which are chargeable to tax and the amount of payment during the year exceeds Rs. 5 lakhs.
New list of payments where no Form 15CA / 15CB is required:
||Purpose code as per RBI
||Nature of payment
||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
||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.)
||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.
Changes in the forms effective from 1st April 2016
Part B of Form 15CA has been divided into two parts i.e. Part B and Part C of Form 15CA.
Part C reporting strictly based on Form 15CB.
Part D, a new section has been introduced for reporting transactions which are not taxable.
A new form called Form No. 15CC has been prescribed for Quarterly statement to be furnished by an authorized dealer in respect of foreign remittances made by him.
Details to be filled in Form 15CA and 15CB
Form 15CA has 4 parts as mentioned below. Depending on amount and taxability of remittance, specific parts of Form 15CA need to be filled:
||If remittance is taxable and the total value of such remittance or remittances during the Financial Year is less than Rs. 5 lakh.
||If remittance is taxable and the total value of such remittance or remittances during the Financial Year is more than Rs. 5 lakh and an order/ certificate u/s 195(2)/ 195(3)/ 197 of Income-tax Act has been obtained from the Assessing Officer.
||If remittance is taxable and the total value of such remittance or remittances during the Financial Year is more than Rs. 5 lakh and a certificate in Form No. 15CB from an accountant as defined in the explanation below sub-section (2) of section 288 has been obtained.
||To be filled up if the remittance is not taxable other than payments referred to in rule 37BB(3) by the person referred to in rule 37BB(2).
The step by step procedure for online filing of Form 15CA is as follows:
Step 1) Go to http://incometaxindiaefiling.gov.in/ and login to your account.
Note: Click here to read the guide on income tax India e-Filing registration process.
Step 2) Click on ‘e-File’ tab and select ‘Prepare and Submit Online Form (Other than ITR)’ from the drop down menu.
Step 3) Select “Form 15CA” from the drop down menu and & click on “Continue”.
Step 4) Select the type of ‘Form 15CA’ applicable to you from the drop down menu.
Step 5) Fill the Form 15CA and click on “Submit” to complete the process.
Note: It is mandatory to upload Form 15CB prior to filling Part C of Form 15CA. To prefill the details in Part C of Form 15CA, the acknowledgment number of e-Filed Form 15CB should be provided.
After completing the process, you will receive a success message on your screen and a conformation email in your registered email account.
Pre-requisite for filing Form 15CB
Pre-requisite In order to file Form 15CB, taxpayer must Add CA. To add CA, please follow the below steps:
Step 1) Login to e-Filing Portal, navigate to “My Account” tab and select “Add CA” option.
Step 2) Enter the “Membership Number” of the CA, select 15CB as “Form Name” and click on “Submit” button.
Once the taxpayer adds the CA, the CA can file Form 15CB in behalf of the taxpayer.
However, the C.A. must be registered as C.A. on the e-filing portal.
Registration process for Chartered Accountant
Step 1) User should be registered as “Chartered Accountant” in the e-filing portal. If not already registered, user should click on “Register Yourself” in the homepage.
Step 2) Select “Chartered Accountants” under “Tax Professional” and click “Continue”.
Step 3) Enter the mandatory details and complete the registration process.
Filing process of Form 15CB for Chartered Accountant
In order to file Form 15CB, Chartered Accountant must follow the below steps:
Step 1) Go to http://incometaxindiaefiling.gov.in/ and click on “Downloads” tab.
Step 2) Click on “Forms (Other than ITR)” tab and download Excel or Java Utility.
Step 3) Prepare the XML file using the utility.
Step 4) Login to e-Filing portal account & go to “e-File” tab and select “Upload Form” from the drop down menu.
Step 5) Upload form, enter PAN/TAN of assessee, PAN of C.A., select “Form Name” as “15CB”, select “Filing Type” as “Original”. Click on submit once you are done and you will receive a success message and an email will be sent to your registered email ID.
Note: DSC is Mandatory to file Form 15CB.
Below is the list of mandatory information required by a client to file a Form 15CA and 15CB
- Details of Remitter
- Name of the remitter
- Address of the remitter
- PAN of the remitter
- Principal place of business of the remitter
- E-Mail address and phone no. of remitter
- Status of the remitter (firm/company/other)
- Details of remittee
- Name and status of the remittee
- Address of the remittee
- Country of the remittee (country to which remittance is made)
- Principal place of the business of the remittee
- Details of the remittance
- Country to which remittance is made
- Currency in which remittance is made
- Amount of remittance in Indian currency
- Proposed date of remittance
- Nature of remittance as per agreement (invoice copy to be asked from client)
- Bank details of the remitter
- Name of bank of the remitter
- Name of branch of the bank
- BSR Code of the bank
- Father’s name of the signing person
- Designation of the signing person
- Documents from the remittee
- Form 10F duly filled by the authorized person of the remittee.
- Tax residency certificate from the remittee (tax registration of the country in which remittee is registered).
- Certificate that the remittee does not have any permanent establishment in India.
This is mandatory if the income is a business income and not chargeable to tax as per DTAA if there is no permanent establishment in India.
Note: This is required only in case of any benefit under DTAA Is Taken, whether by way of lower rate of deduction of tax At Source or no deduction of tax at source as per DTAA.