Generally, 15CA CB is not necessary to make a payment abroad in the event that costs fall below the defined limit. That’s because you’re a member of the Remittee. In the case of rent charged to NRIs / foreign vendor, Pursuant to Section 195 of the Income Tax Act 1961, any person liable for making a payment to non-residents shall subtract TDS at the rates in place from the payments rendered or credits granted to non-residents. The Reserve Bank of India also requires that, with the exception of such personal remittances that have been expressly removed, no remittances should be rendered to a non-resident without sending an undertaking in Form 15CA followed by an accountant’s certificate in Form 15CB, Remember that this is
- Individuals making payment for bills/invoices must apply Form 15CA to the income tax portal each time before paying for the excess of expenses.
- In fact, if the cumulative amount to be made each year reaches Rs 5 lakh, the Remitter must receive Form 15CB from the Chartered Accountant.
When you make a payment to a foreign seller, it is your duty to figure out if the Remittee is an NRI. This makes it easier for you to subtract TDS for the invoice to be received and to comply with the Income Tax Act. The aim of this undertaking and credential is to raise taxes as the remittance is made, because it will not be practicable for the non-residents to reclaim the tax at a later date. The format of the undertaking to be registered electronically in Form 15CA and the format of the Accountant’s certificate in Form 15CB were notified vide Rule 37BB of the Income Tax Rules 1962
Revised guidelines on filing forms 15CA and 15CB
The latest guidelines to register electronic forms 15CA and 15CB are valid as of 1 April 2016. The comprehensive procedure for filing the form as per requirement is focused on new laws that follow. The income tax department has updated the rules governing the preparation and delivery of Form 15CA and Form 15CB (see previous Form 15CB regulations). As of 1 April 2016, updated rules became applicable.
Major changes are as follows –
- Form 15CA and 15CB shall NOT be needed to be submitted by a person for remittance which does not require RBI approval
- List of payments of a defined nature referred to in Rule 37BB, which do not require the submission of Form 15CA and Form 15CB, has been extended from 28 to 33 including import payments
- Form No. 15CB will only be needed for non-resident payments which are taxable and surpass Rs. 5 lakhs.
- Only Part A of 15CA is required when the volume of payment or the number of these payments made during the financial year does not exceed five lakh rupees
- Part B of 15CA to be filled in the event of receiving a certificate from the Assessing Officer pursuant to section 197 or an order from the Assessing Officer pursuant to subsection (2) or subsection (3) of section 195. For example, Form 15CB is not necessary if order or certificate is obtained from AO
- Part C of 15CA may be filled out after a Chartered Accountant obtains a certificate in Form No. 15CB
- Part D of Type No.15CA where there is some amount not paid under the terms of the Act. For eg, Form 15CB is not needed if the remittance is not taxable
- 1 lakh penalty will apply for each non-filing default for 15CA / CB certification
Forms 15CA and 15CB are of considerable interest nowadays. We professional at least have to issue one Form 15CB on a routine basis and 15CA form is also to be generated on behalf by the professional. Form 15CA is a Remitter Certification that is used as a method for collecting data about transfers that are taxable in the hands of non-resident users. It begins with an effective information retrieval program that the Income Tax Department will use to track foreign remittances separately and their existence to assess tax liability. The mechanism for picking cases for scrutiny has dramatically deteriorated in modern times and without an inspection, there was no test to ensure that taxable foreign remittances were made after-tax deduction or not. So the remittance path, i.e. Banks were led to acquiring Form 15CA and Form 15CB before allowing any remittance.
Authorized Dealers / Banks are now becoming more cautious in ensuring that all these Forms are collected by them before they are remitted, as now, in accordance with the revised Rule 37BB, they are expected to file Form 15CA obtained from the remitter, with the income tax authority for any proceedings under the Income Tax Act and also with the revised FEMA Guidelines released. In this regard, as per the updated RBI Guidelines, The RBI does not provide guidelines on the deduction of tax on international remittances at the source. The banks, therefore, encourage remitters to have these Type 15CA and 15CB even while buying imports.
Here’s an effort to render a detailed checklist/procedure for furnishing Form 15CA and Form 15CB effectively.
Step by step Process to File Form 15CA and 15CB all online summation with effect from April 1, 2016
Steps for procedures: We are used to helping our clients in transferring funds from India to out of India after Satisfy the sources and taxability of the fund, below four Steps for procedures which is needed to follow:
- Obtain Chartered Accountant (CA) Certificate in Form 15CB – CA must verifying (though his own procedures) the source is determining the sources of funds is the TDS is properly deducted on such source,
- Submit Form 15CA online,
- Submit documents to Bank where NRE accounts kept
- Form 15CA
- Form 15CB
- Check (cheque) or Demand Draft for the amount
- Request letter or Form as per respective bank’s requirement
- Complete any other document, requirement or formality
- Transfer: On verification of submitted documents, Bank will process the transfer and credit NRE account.
Mandatory details required when filing in the forms 15CA and 15CB certification
1. Details of Remitter
- Complete Name of the remitter
- Complete address, an email with the phone number of the remitter
- permanent account number availability of the remitter
- Complete Main place of business of the remitter
- The E-Mail address and phone no. of the remitter
- Status (today) of the person remitter the transaction (company/ firm /other)
2. Details of the Remittance
- Proposed date of remittance
- Nature of transaction as per agreement (invoice copy to be asked from client)
- Source of fund proof (if any)
- Country to and Currency in which remittance is made
- Amount of remittance in Indian currency
3. Bank details of the Remitter
- Name of bank of the remitter
- Name of the Bank with Branch details
- BSR code of Bank from which remittance is to be made –
4. Details of Remittee
- Complete Name of the remittee :
- Complete address, email with phone number of the remittee
- Details of Country of the remittee (In which remittance is to be made)
- Complete Main place of the business of the remittee
5. Documents from the Remittee
- Form 10F duly filled by the authorized person of the remittee.
- Document of Tax residency certificate from the remittee (Tax registration of the country in which remittee is registered).
- Section under which order/certificate has been obtained ( if any )
6. Other details needed
- Father’s name of the authorised person /signing person
- Designation of the authorised person /signing person
- Proof of payment of Tax on fund transfer from India,
- Proposed date of remittance –
- Complete name of such bank and branch –
- Supporting Documents for Remittance
- The digital signature of the person who required to fund Transfer,
If you’re searching for more current information on these forms, their processes or any enforcement relevant to them, our team of experts will support.
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Disclaimer: The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances; Before making any decisions do consult your Professional / tax advisor. For misrepresentation or interpretation of act or rules Author does not take any responsibility. Neither the author nor the firm accepts any liability for the loss or damage of any kind arising out of information in this document or for any action taken in reliance there on. The author is a Chartered Accountant and the Chief Gardener & Founder Director of Rajput Jain & Associates , a leading Tax & Investment Planning Advisory Service Provider. His blog can be found at http://carajput.com/blog/For any query you can write to email@example.com. Hope the information will assist you in your Professional endeavors. For query or help, contact: firstname.lastname@example.org or call at 09811322785/4 9555 5555 480)