Complete Understanding about Form 15CA, Form 15CB
International transactions come with a lot of tax implications. And one often is absent on these Section 195 of the Income Tax Act specifies that we withhold tax on sums that are taxable under the Statute. And the banks maintain these databases for financial transactions.
Additionally, anytime we make some payment to a non-resident, the bank tests whether or not we have paid duty. So for that dimension, they depend on Chartered Accountants certificates. We are sending this information to banks with Form 15CA and CB. Type 15 CB is usually prepared and approved by CA.
This blog explains Applicability of Form 15CA and Form 15CB w.r.t Taxability under the IT Act, Overview of Section 9 and Documentation needed for Form 15CA and Form 15CB, What is necessary of Form 15CA and Form 15CB, What is Form 15CA and Form 15CB, Payment / Remittances does not require Form 15CA & Form 15CB, which requires Remitter information, Remittee information, Remittance details, Bank details of the Remittance.
What is Form 15CA?
Certification 15CA is the remitter’s declaration. And a method used to collect information about payments made to non-residents. Indeed the form includes the remittance information. As well as the transaction’s tax details. In fact, whether or not the invoice is subject to vat.
Registered dealers and banks are now making sure we pay taxes on purchases that are made by them. And they are asking us to request these forms before the transaction is processed. They compile those forms and exchange them with the tax authority in addition.
This actually forms part of an Income Tax Department Information Management Framework. To assess tax responsibility, it monitors the overseas remittances and their existence.
Department of Income Tax has also created an online facility to file these documents. Therefore we register Form 15CA with the IT department online. Though we are still printing and sharing the details with the bank / AD after submission online.
Different Parts in the Form 15CA
We divide form 15CA into 4 parts––
- Section A:– Where the remittance or sum of this remittance will not surpass 5 lakh rupees during the F.Y. (Taxable, or not).
- PART B: – Where the A.O. has obtained an order/certificate u / s 195(2)/195(3)/197 of the Income Tax Act; (If Nil or Lower rate certificate).
- PART C: – Where, during the FY, the remittance or the sum of such remittance crosses 5 lakh rupees.
- PART D: – Where the remittance is not tax-due
What is Form 15CB?
Form 15 CB is a certificate, and a Chartered Accountant is required to sign. The certificate sets down in detail the rates and taxes payable. Or in some situations, explanations why taxes are paid.
All types have basically the same material. 15CB does require registration, however. We also file Form 15CB first as its acknowledgment number is provided while filling the Form 15CA
Form 15CA & CB Applicability
Whether furnishing forms 15CA & 15CB are required for each and every foreign transaction?
In addition, as per the Updated Income Tax Laws, we now only need Form No. 15CB for all taxable and exceeding Rs 5 lakhs payments.
The following types of transactions are not needed for the 15CA CB form:
- An individual transaction that doesn’t need RBI permission.
- Payments of a specified nature referred to in Rule 37BB (shared shortly below). However, we’ve heard of cases where banks still ask for a 15CA CB even when not needed. According to the Income Tax Rules, no filing is to be made in Form 15CA and 15CB in the case of the following type of international remittances (as provided for in Rule 37BB). See the detailed list here. Link
Who is responsible for filing the Form 15CA and Form CB
A person responsible for making the payment to a non-resident or a foreign corporation must have the following information –
Where payment is made below Rs 5 lakh
Information for these payments is provided in Part A of Form 15CA
Where payment crosses Rs 5 lakh
- Part B of Form 15CA must be issued
- CA’s certificate in Form 15CB
- Part C of Form 15CA
Where the payment made is not taxable under The Act
- Portion D of Form 15CA
- In the following situations,
No information is needed where The remittance is made by a person and does not need prior approval by the Reserve Bank of India [as provided for in Section 5 of the Foreign Exchange Management Act, 1999 (42 of 1999) read in Schedule III to the Foreign Exchange
Notes: We’ve heard of situations where banks are always calling for a 15CA CB even though they don’t need it. In the case of the following forms of foreign remittances (as provided for in Rule 37BB), no filing shall be made in Form 15CA and 15CB, in compliance with the Income Tax Laws. Click here for the full list.
The new rules for filing electronic forms 15CA and 15CB are valid as of 1 April 2016. The comprehensive method of filing the form according to specifications is based on new regulations. The department of income tax has updated the rules on form 15CA and formula 15CB preparedness and application (see previous Form 15CB rules). From 1 April 2016, the new rules came into effect.
- Form 15CA and 15CB shall NOT be needed to be furnished for remittance by a person who does not need RBI approval
- List of payments of a defined nature referred to in Rule 37BB, which do not need the submission of Form 15CA and Form 15CB, has been extended from 28 to 33, including import payments
- Form No. 15CB is necessary only for payments made to non-residents that 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 an 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 Form No.15CA for any amount not chargeable in compliance with the rules of the Statute. For eg, Form 15CB is not needed if the remittance is not taxable
- 1 lakh penalty would apply for each non-filing default for forms 15CA / CB
Steps for certification procedures 15CA and 15CB:
We are used to assisting our clients in transferring money from India to India after Fulfilling the Fund’s origins and taxability, below four Stages for Procedures to follow:
- Obtaining a Chartered Accountant (CA) Certificate in Form 15CB – CA must check (although its own procedures) that the source specifies the origins of funds if the TDS is correctly deducted from the flow;
- Upload Online Form 15CA,
- Send documentation to the bank holding NRE accounts
- Form 15CA
- Form 15CB
- Check (cheque) or Demand Draft for the amount
- Request letter or form as required by the respective bank
- Complete all other papers, specifications, or formalities
- Transfer: Bank must process the transfer and credit NRE account after a review of submitted documents.
Mandatory details are required when filling in the forms 15CA and 15CB certification
1. Details of Remitter
- Complete Name of the remitter
- Complete address, the email with the phone number of the emitter
- 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 a 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 the 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, an email with the 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 authorized person /signing person
- Designation of the authorized 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
- A digital signature of the person who required to fund Transfer,
If you are searching for more current information on these forms, their protocols or any related enforcement, our team of experts will assist you.
Who Delaying or failing to submit Form 15CA, Form 15CB
Any person who fails for delaying or failing to submit Forms 15CA & 15CB to the Income-tax dept is entitled to impose a penalty of INR 1,00,000/- on the defaulter. The penalty is also payable in the event that the person files incorrect information or files the wrong section of Form 15CA. The person shall be deemed to have defaulted until he/she has been unable to make a reasonable reason for failure to submit the form.
Latest Update For The Months of June 2021
Due to technical issue of the Released recently income Tax Portal, Manual Submission of 15CA/CB to AD are allowed, AD is encouraged to accept the manual form. Later on, service will be supplied to upload such manual forms for records.
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