Foreign remittances ? Check when Form 15CA & 15CB must be Submitted www.munoyat.com
Are you making payments from India to any other Country, Then you requires to follow certain compliance, This article is basically for compliance related to submission of Form 15CA and 15CB.
Foreign Remittances attract tax implications, which is mandated by Section 195 of the Income Tax Act 1961.
Section 195 of the Income Tax Act 1961 mandates the deduction on tax on any payments made to non-residents/foreigners/foreign companies.
The purpose of deduction of taxes is to collect the taxes at the earlier stage as it may not possible to collect the taxes from NRI at a later stage.
The person who is making payments to NRIs need to furnish an undertaking in Form 15CA accompanied by Form 15CB in certain cases.
This article covers
1. What is Form 15CA?
2. What is Form 15CB?
3. Remittances which don't require Form 15CB
4. Remittances which don't require 15CA & Form 15CB?
5. Details required for filing Form 15CA & Form 15CB
1. What is Form 15CA?
Form 15CA is a declaration of remitter (sender if money to NRI) and is considered as a tool for collecting information of payments to Non-residents. This will help the Income Tax Department to determine whether the payments are taxable or non-taxable in the hands of non-resident. Banks and Authorized dealers are now becoming more conscious in ensuring that form 15CA/form 15CB are received by them before remittance
A person who is making foreign remittance need to furnish Form 15CA. It is required to be submitted online. In certain cases, a certificate from Chartered Accountant in form 15CB is required to be submitted along with form 15CA. Form 15CA consists of 4 parts.
Part A: It is required to be filed if the remittance is chargeable to tax and the aggregate of such remittances does not exceed Rs 5 Lakhs during the financial year
Part B: It is required to be filed if the remittance is chargeable to tax and the aggregate of such remittances exceeds Rs 5 Lakhs during the financial year and an order/ certificate u/s 195(2) /195(3)/197 of Income Tax act has been obtained from the Assessing Officer.
Part C: It is required to be filed if the remittance is chargeable to tax and the aggregate of such remittances exceeds Rs 5 Lakhs during the financial year and a certificate in form 15CB is required to be obtained
Part D: It is required to be filed if the remittance is not chargeable to tax under the provisions of Income Tax act.
2. What is Form 15CB?
The liability of withholding tax can be ascertained and certified by obtaining the certificate from Chartered Accountant in Form No 15CB. A CA certifies the details of payment, TDS rate, TDS deduction etc. For uploading Part C of Form 15CA, an Acknowledgement number of Form 15CB is mandatory.
3. Remittances which don't require Form 15CB
Form 15CB is not required in the following cases
a. 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
b. Form 15CB is not required where a certificate from the AO u/s 197 or 195(2) / (3) has been obtained.
c. Form 15CB is not required where sum payable is not chargeable to tax under the provisions of Income Tax Act.
d. No information is required to be furnished for any sum which is not chargeable under the provision of the Act, if the remittance is made by an individual as per the provision of Foreign Exchange Management Act, 1999 read with schedule III to the Foreign Exchange (Current Account Transactions) Rules, 2000
e. No information is required to be furnished for any remittance which is of the nature specified in the list given in Rule 37BB
4. Remittances which don’t require 15CA & Form 15CB?
Form 15CA and Form 15CB are not required for the transactions which does not require RBI approval. Following are the payments prescribed by RBI as per rule 37BB.
5. Details required for filing Form 15CA & Form 15CB
The following information is required to file form 15CA and Form 15CB
A. Details of Remitter(sender)
a. Name and Address of Remitter
b. PAN of Remitter
c. Status of Remitter (Individual/ Firm/LLP/Company/Trust etc)
d. Email id and Mobile number of Remitter
B. Details of Remittee (recipient)
a. Name and Address of Remittee
b. Status of Remittee (Individual/ Firm/LLP/Company/ etc)
c. Country of the Remittee
C. Country to which Remittance is made
D. Currency in which remittance is made
E. Amount of Remittance in Indian Currency
F. Proposed date of Remittance
G. Nature of Remittance
H. Bank Details of Remitter (Name, Bank, Branch and BSR Code of Bank)
Requirement of Form 15CA and Form 15CB on payments to NRO bank accounts of NRI's
There are numerous incomes being paid to non-residents through their NRO accounts like interest, capital gains, rents etc. These types of incomes are liable to TDS u/s 195. As these payments are being made to NRO account and the payments are in Indian Rupee, Form 15CA and Form 15CB is not required
Applicability of Form 15CA and Form 15CB for remittance from NRO account by NRI
1. Non-resident who earns income in India through Rental Income, Bank interest, Sale of properties/shares etc and the same is being credit to his NRO account then the non-resident may transfer such amount from NRO account to NRE account.
2. Before transferring the same from NRO to NRE Account, the non-resident is required to file Form 15CA/Form 15CB accordingly depending on the nature of transaction
If you require any clarification, you can contact us at the below mentioned mobile number.
Regards
CA Sushma Munoyat,
www.munoyat.com
9481262800
fcasushmajain@gmail.com,
casushmajain@gmail.com
The Section 195 of the Income Tax Act is reproduced below for your ready reference.
195. (1) 91Any person responsible for paying to a non-resident, not being a company, or to a foreign company, any interest (not being interest referred to in section 194LB or section 194LC) 92[or section 194LD] or any other sum chargeable under the provisions of this Act (not being income chargeable under the head "Salaries") shall, at the time of credit of such income to the account of the payee or at the time of payment thereof in cash or by the issue of a cheque or draft or by any other mode, whichever is earlier, deduct income-tax thereon at the rates in force :
Provided that in the case of interest payable by the Government or a public sector bank within the meaning of clause (23D) of section 10 or a public financial institution within the meaning of that clause, deduction of tax shall be made only at the time of payment thereof in cash or by the issue of a cheque or draft or by any other mode :
Provided further that no such deduction shall be made in respect of any dividends referred to in section 115-O.
Explanation 1.—For the purposes of this section, where any interest or other sum as aforesaid is credited to any account, whether called "Interest payable account" or "Suspense account" or by any other name, in the books of account of the person liable to pay such income, such crediting shall be deemed to be credit of such income to the account of the payee and the provisions of this section shall apply accordingly.
Explanation 2.—For the removal of doubts, it is hereby clarified that the obligation to comply with sub-section (1) and to make deduction thereunder applies and shall be deemed to have always applied and extends and shall be deemed to have always extended to all persons, resident or non-resident, whether or not the non-resident person has—
(i) a residence or place of business or business connection in India; or
(ii) any other presence in any manner whatsoever in India.
(2) Where the person responsible for paying any such sum chargeable under this Act (other than salary) to a non-resident considers that the whole of such sum would not be income chargeable in the case of the recipient, he may make an application to the Assessing Officer to determine, by general or special order, the appropriate proportion of such sum so chargeable, and upon such determination, tax shall be deducted under sub-section (1) only on that proportion of the sum which is so chargeable.
(3) Subject to rules93 made under sub-section (5), any person entitled to receive any interest or other sum on which income-tax has to be deducted under sub-section (1) may make an application in the prescribed form to the Assessing Officer for the grant of a certificate authorising him to receive such interest or other sum without deduction of tax under that sub-section, and where any such certificate is granted, every person responsible for paying such interest or other sum to the person to whom such certificate is granted shall, so long as the certificate is in force, make payment of such interest or other sum without deducting tax thereon under sub-section (1).
(4) A certificate granted under sub-section (3) shall remain in force till the expiry of the period specified therein or, if it is cancelled by the Assessing Officer before the expiry of such period, till such cancellation.
(5) The Board may, having regard to the convenience of assessees and the interests of revenue, by notification in the Official Gazette, make rules specifying the cases in which, and the circumstances under which, an application may be made for the grant of a certificate under sub-section (3) and the conditions subject to which such certificate may be granted and providing for all other matters connected therewith.
94[(6) The person responsible for paying to a non-resident, not being a company, or to a foreign company, any sum, whether or not chargeable under the provisions of this Act, shall furnish the information relating to payment of such sum, in such form and manner, as may be prescribed.95]
(7) Notwithstanding anything contained in sub-section (1) and sub-section (2), the Board may, by notification in the Official Gazette, specify a class of persons or cases, where the person responsible for paying to a non-resident, not being a company, or to a foreign company, any sum, whether or not chargeable under the provisions of this Act, shall make an application to the Assessing Officer to determine, by general or special order, the appropriate proportion of sum chargeable, and upon such determination, tax shall be deducted under sub-section (1) on that proportion of the sum which is so chargeable.