form 15ca and 15cb - a complete guide

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All about 15CA & 15CB


What is the need?

While making payment for any purchase of Taxable Material or Services from an overseas entity, withholding tax need to be deducted and Form 15CA and 15CB are declaration for the

same


What is the need? As per Section 195 of the Income Tax Act 1961, every person liable for making a payment to non-residents shall deduct TDS from the payments made or credits given to non-residents at the rates in force. RBI also mandates that except in cases of certain personal remittances which have been specifically exempted, no remittance should be made to a non-resident without furnishing an undertaking in Form 15CA accompanied by a certificate from an Accountant in Form 15CB


What is the need? The purpose of this undertaking and certificate 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. The format of the undertaking in Form 15CA which is to be filed electronically and the format of the certificate of the Accountant in Form 15CB have been notified vide Rule 37BB of the Income Tax Rules 1962


What is Form 15CA

Form 15CA is a Declaration given by Remitter and is used as a tool by statutory authorities for collecting information in respect of payments which are chargeable to tax in the hands of recipient non-resident. This is starting of an effective Information Processing System which may be utilized by the Income tax Department to independently track the foreign remittances and their nature to determine tax liability.


What is Form 15CA

Authorised Dealers / Banks are now becoming more vigilant in ensuring that such Forms are received by them before remittance is effected since as per Rule 37BB a duty is casted on them to furnish Form 15CA received from remitter, to an income-tax authority for the purposes of any proceedings under the Income-tax Act.


What is Form 15CB The person making the payment needs to obtain a certificate from a Chartered Accountant in Form 15CB. 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.


What is Form 15CB 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 Assessee 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.


Payment / Remittances doesn’t require 15CA

Fourteenth Amendment Rules, which are applicable from October 1, 2013, provides for the list of Payments / Remittances which doesn’t require compliances and reporting through the submission of 15CA and in turn Certificate from Chartered Accountant in Form 15CB. The list of these twenty eight items is covered in the table in further slides:



S. No.

Purpose code as per RBI

Nature of Payment

1 S0001 Indian investment abroad -in equity capital (shares)

2 S0002 Indian investment abroad -in debt securities

3 S0003 Indian investment abroad -in branches and wholly owned subsidiaries

4 S0004 Indian investment abroad -in subsidiaries and associates

5 S0005 Indian investment abroad -in real estate

6 S0011 Loans extended to Non-Residents

7 S0202 Payment- for operating expenses of Indian shipping companies operating abroad.

8 S0208 Operating expenses of Indian Airlines companies operating abroad



S. No.


Nature of Payment

9 S0212 Booking of passages abroad -Airlines companies

10 S0301 Remittance towards business travel

11 S0302 Travel under basic travel quota (BTQ)

12 S0303 Travel for pilgrimage

13 S0304 Travel for medical treatment

14 S0305 Travel for education (including fees, hostel expenses etc.)

15 S0401 Postal services

16 S0501 Construction of projects abroad by Indian companies including import of goods at project site



S. No.


Nature of Payment

17 S0602 Freight insurance – relating to import and export of goods

18 S1011 Payments for maintenance of offices abroad

19 S1201 Maintenance of Indian embassies abroad

20 S1202 Remittances by foreign embassies in India

21 S1301 Remittance by non-residents towards family maintenance and-savings

22 S1302 Remittance towards personal gifts and donations

23 S1303 Remittance towards donations to religious and charitable institutions abroad

24 S1304 Remittance towards grants and donations to other Governments and charitable institutions established by the Governments.



S. No.


Nature of Payment

25 S1305 Contributions or donations by the Government to international institutions

26 S1306 Remittance towards payment or refund of taxes.

27 S1501 Refunds or rebates or reduction in invoice value on account of exports

28 S1503 Payments by residents for international bidding.


Applicability – Various Scenarios Form 15 CA

If remittance isn’t chargeable to Tax

Scenario Applicability (a) Single remittance doesn't exceed Rs

50,000; And b) Aggregate payment during year doesn't

exceed Rs 2,50,000

Not to be reported at all

(a) Single remittance exceed Rs 50,000; And b) Aggregate payment during year doesn't

exceed Rs 2,50,000




If remittance isn’t chargeable to Tax

Scenario Applicability (a) Single remittance doesn't exceed Rs

50,000; And b) Aggregate payment during year exceed Rs

2,50,000




If remittance is chargeable to Tax (including Salary or Interst)

Scenario Applicability (a) Single remittance doesn't exceed

Rs 50,000; And b) Aggregate payment during year

doesn’t exceed Rs 2,50,000

To to be reported in Part A of Form 15CA

(a) Single remittance exceed Rs 50,000;

And b) Aggregate payment during year

doesn’t exceed Rs 2,50,000

To be reported in Part B of Form 15CA along with Form 15CB and other prescribed documents, if any



If remittance is chargeable to Tax (including Salary or Interst)

Scenario Applicability (a) Single remittance doesn't exceed

Rs 50,000; And b) Aggregate payment during year

exceed Rs 2,50,000

To be reported in Part B of Form 15CA along with Form 15CB and other prescribed documents, if any


Details to be provided in Form 15CA Form 15 CA

To be filled up by the person responsible for making remittance to NR or foreign company which is chargeable to tax in India (including interest or salary)

Part A of Form 15 CA (Form 15CB is not required)

Particulars Details

Who shall fill it

To be filled up if the remittance to non- resident or to a foreign company does not exceed Rs. 50,000 per transaction and aggregate of such payments made during the financial year does not exceed Rs. 2,50,000


Details to be provided in Form 15CA

Particulars Details What information has to be filled in?

In respect of Remitter • Permanent Account Number (PAN) and Tax

Deduction and collection Account Number (TAN) should be mentioned. TAN is mandatory in cases where: • tax has been deducted or will be deducted at

source; • the remitter has obtained an order under

section 195 (2) of the Income-tax Act from the Assessing Officer.

• In case an invalid PAN and/or TAN is filled in by the remitter, the Form will not be generated




Particulars Details

• In case the remitter does not have a TAN, it is mandatory to quote PAN of the remitter.

• PAN of the remitter should invariably be given. However, the same is mandatory if status of entity is Company or Firm. If PAN is not given in such cases, the remitter will not be allowed to generate the Form.

• Details in at least two address fields for remitter should be mentioned

• Name of the entity should be mentioned in the “Name of remitter” field.

• No value is to be provided in Area code, AO type, Range code & AO number. The fields will be entered by the system after validating the PAN and/or TAN.

• Email id and mobile number, if any, should be provided.




Particulars Details In respect of Recipient of Remittance • Complete address of recipient of remittance,

separated by coma, should be provided. • PAN, allotted by the Indian Income Tax Department

should be mentioned. • If status of entity is “company”, then provide type

of company i.e., “domestic” or “other than domestic”.

• In the field “Principal Place of Business”, the country of tax residence of the recipient of the remittance should be mentioned.




Particulars Details In respect of Remittance • Amount payable before TDS (In Indian Currency) • Aggregate amount of remittance made during the

financial year including this proposed remittance • Name of Bank and details of the branch of bank • Proposed date of remittance • Nature of remittance • Tax deducted—

(a) Amount of tax deducted (b) Date of deduction



Details to be provided in Form 15CA Part B of Form 15 CA (Form 15CB is required)

Particulars Details

Who shall fill it

To be filled up for remittances other those specified in Part A (If the Remittance is chargeable to tax and exceed Rs. 50000 per transaction and aggregate of such payments made during the financial year exceeds Rs. 2,50,000)

What information has to be filled

1. Forms prescribe mandatory application of provisions of Section 206AA, if PAN of remittee is not available;

2. Other details: Divided into Section A and Section B



Particulars Details

Section A Details of Remitter, Remittee and Accountant to be specified in this section In respect of details of Accountant, following are important: • Date of certificate should not be a future date. • Registration number should be numeric. • Details of accountant are not required if point no.

15 is selected i.e. any order u/s 195 (2)/ 195 (3)/ 197 of the Income-tax Act has been obtained from Assessing Officer.

• Certificate number is an alphanumeric field



Particulars Details

Section B Particulars of Remittance and TDS (as per certificate of accountant), namely: a. Remittance details b. Taxability under the Income Tax Act without

considering the relief of the DTAA c. If income is chargeable to tax in India & relief is

claimed under DTAA, whether TRC has been obtained from recipient?

d. TDS details e. If remittance is on account of capital gains details of

amount of short-term, long-term capital gains and the basis of arriving at the taxable income.



Part B of Form 15CA is to be filled after obtaining either of the below: a. A certificate in form no. 15CB from an Accountant

(Chartered Accountant) or b. A certificate from the Assessing Officer (AO) under Sec

197 or c. An order from Assessing Officer under sub-sec (2) or

sub-section (3) of sec 195


Details to be provided in Form 15CA Guidelines for Part B of Form 15 CA

• Provide the values as per the accountant certificate obtained in Form 15CB.

• In case name of the country is not available in drop down list, select value “other” from the drop down and provide name of the country.

• In case currency name is not available in drop down then select value “other” from the drop down and provide name of the currency.

• Proposed date of remittance should be current date or a future date.

• Amount of TDS should be less than amount of remittance. • Actual amount of remittance after TDS should be less than

amount of remittance.



• Select type of the bank: • Indian Bank (Bank of India, Dena Bank etc.) • Foreign Bank (Standard Chartered Bank, HSBC, Citi Bank etc.)

• In case of “Indian Bank”, user will be required to provide “Name of the branch” and “BSR code”

• In case of “Foreign Bank”, user will be required to provide details of location i.e. Located in India or Located outside India

• In case of foreign bank located in India, user will be further required to provide “Name of the branch” and “BSR code”

• In case of foreign bank located outside India, user will be further required to provide:

• Name of the branch • BSR code (This will be optional) • Code of branch (This will be mandatory)



• Rate of TDS as per DTAA (if applicable) should be mentioned up to two decimal places.

• Amount should be mentioned up to 2 decimal places. • Select any one out of fields 12, 13, 14 and 16. One

form is to be filled for one type of remittance. • Details of “responsible person” should be mentioned

for verification. • Value for “rate of deduction as per the Income-tax Act”

should be “0.00” if no tax has been deducted and “amount of TDS in Indian and foreign currency” should be “0.00”.



Based on the above discussions it can be concluded that: a. There are 28 types of payments for which no

information is required to be furnished at all. b. Form 15CB is not required where Part A of Form 15CA is

to be filled in, i.e., in case of small payments. c. In case of other payments, either an order or a

certificate of the Assessing Officer u/s. 197 / 195(2) / 195(3) must be obtained, or a certificate of the Chartered Accountant should be obtained.

d. Sub-rule (2) of Rule 37BB mandates that Form 15CA shall be furnished to the authorised dealer prior to remitting the payment.



e. Rule 37BB casts a duty on the authorised dealer to furnish Form 15CA submitted by the remitter to an income-tax authority for the purposes of any proceedings under the Income-tax Act.

f. Form 15CA state that in the absence of the PAN of the recipient, provisions of section 206AA shall apply.

g. Form 15CB requires detailed enumeration of the taxability of the amount under the Income-tax Act, without giving any effect to the DTAA. Where DTAA provisions are sought to be applied, the details of the Tax Residency Certificate, applicable DTAA and its relevant article, as also tax liability under the DTAA are to be furnished.


Changes introduced in Finance Act, 2015 in respect of Form 15CA and Form 15CB under Section 195(6) of Income tax

Act, 1961


Changes in Finance Act, 2015 Section 195 (6) has been amended in the Finance Act 2015 and states that Form 15CA / CB needs to be necessarily filed for all remittances, whether chargeable to tax in India or not. All the assessees are requested for submission of Form 15CA / 15CB for all outward cross border remittances including those against imports with effect from 1st June 2015 Previously Section 195(6) of the Act used to provide that any person responsible for making payments to a non-resident of any sum chargeable under the IT Act will provide such information as may be prescribed in Form 15CA and 15CB.


Changes in Finance Act, 2015 Previously there was no penalty prescribed for non-furnishing of information or furnishing of incorrect information under section 195(6) of the IT Act (i.e. Form 15CA and Form 15CB). It is now proposed to provide a penalty of one lakh rupees in case of non-furnishing of information or furnishing of incorrect information under section 195(6) (i.e. Form 15CA and Form 15CB) of the Act.


Changes introduced vide Press Release dated 17th December

2015 under Rule 37BB of Income tax Rules


Changes vide Press release dated 17.12.15

• No Form 15CA and 15CB will be required to be furnished by an individual for remittance which do not requiring RBI approval under its Liberalised Remittance Scheme (LRS)

• The list of payments of specified nature mentioned in Rule 37 BB which do not require submission of Forms 15CA and 15CB has been expanded from 28 to 33 including payments for imports.

• A CA certificate in Form No. 15CB will be required to be furnished only in respect of such payments made to non-residents which are chargeable to tax and the amount of payment during the year exceeds Rs. 5 lakh.

The amended Rules will become applicable from 1st April 2016 and were notified vide Notification No. G.S.R. 978(E) dated 16th December, 2015


S. No.


Nature of Payment

29 S0101 Advance payment against imports

30 S0102 Payment towards imports - settlement of invoice

31 S0103 Imports by diplomatic missions

32 S0104 Intermediary trade

33 S0190 Imports below Rs.5,00,000 - (For use by ECD offices)

Payment / Remittances doesn’t require 15CA – Newly added five items over and above earlier notified 28 items to make

the list of 33 items


Changes introduced in April 2016 in respect of Form 15CA

and Form 15CB under Rule 37BB of Income tax Rules


Changes applicable from 1st April 16 Start

Is remittance

Taxable

Covered under

specified exemption

list

15CA – Part D 15CB – X

Yes > Rs. 5 Lacs in

FY

Yes Certificate u/s 195 / 197

Yes 15CA – Part B 15CB – X

15CA – X 15CB – X

Yes 15CA – Part A

15CB – X 15CA – Part C

15CB –

End

No No No

No


Changes applicable from 1st April 16 The CBDT has amended Rule 37 BB of the Income-tax Rules and made following changes which are applicable from 1st April 2016: The furnishing of information for payment to a non-resident, not being a company, or to a foreign company in Form 15CA has been classified into 4 parts – Part A, Part B, Part C and Part D, wherein:


Changes applicable from 1st April 16 Part A: Where the remittance or the aggregate of such remittances does not exceed 5 lakh rupees during the FY. (Whether taxable or not) Part B: Where an order / certificate u/s 195(2) / 195(3) / 197 of Income-tax Act has been obtained from the AO. (Whether NIL rate or Lower Rate Certificate) Part C: Where remittance is chargeable to tax under domestic law and the remittance or the aggregate of such remittances exceeds 5 lakh rupees during the FY and a certificate in Form No. 15CB has been obtained electronically from a CA. (Utility available on Income Tax e-filing Website) Part D: Where the remittance is not chargeable to tax under Domestic Law.


Changes applicable from 1st April 16

No 15CA / CB is required in following cases: • if an individual is making remittance which do

not requiring RBI approval under its Liberalized Remittance Scheme (LRS) or items mentioned in Schedule III to the Foreign Exchange (Current Account Transaction) Rules, 2000 as stated in further slides

Or • If remittance is in the nature of 33 items

provided in the rule 37BB as stated in previous slides



Individuals can avail of foreign exchange facility for the following purposes within the limit of USD 2,50,000 only. Any additional remittance in excess of the said limit for the following purposes shall require prior approval of the Reserve Bank of India. i. Private visits to any country (except Nepal and Bhutan) ii. Gift or donation. iii. Going abroad for employment iv. Emigration v. Maintenance of close relatives abroad

Items mentioned in Schedule III to the Foreign Exchange (Current Account Transaction) Rules, 2000



vi. Travel for business, or attending a conference or specialised training or for meeting expenses for meeting medical expenses, or check-up abroad, or for accompanying as attendant to a patient going abroad for medical treatment/ check-up.

vii. Expenses in connection with medical treatment abroad

viii. Studies abroad ix. Any other current account transaction




Provided that for the purposes mentioned at item numbers (iv), (vii) and (viii), the individual may avail of exchange facility for an amount in excess of the limit prescribed under the Liberalised Remittance Scheme as provided in regulation 4 to FEMA Notification 1/2000-RB, dated the 3rd May, 2000 if it is so required by a country of emigration, medical institute offering treatment or the university, respectively. Provided further that if an individual remits any amount under the said Liberalised Remittance Scheme in a financial year, then the applicable limit for such individual would be reduced from USD 250,000 by the amount so remitted.




Provided also that for a person who is resident but not permanently resident in India and a. is a citizen of a foreign State other than Pakistan; or b. is a citizen of India, who is on deputation to the

office or branch of a foreign company or subsidiary or joint venture in India of such foreign company,

may make remittance up to his net salary (after deduction of taxes, contribution to provident fund and other deductions).




When payment is chargeable to Income-tax Act, 1961 and exceeds Rs. 5 Lac during the financial year: • In case an order is obtained from Assessing Officer

under section 195(2) or 195(3) or a Certificate is obtained from Assessing Officer under Section 197: Information is required in Part B of Form 15CA

• In any other cases Information is required in Part C of form 15CA,

after obtaining a Certificate in Form 15CB from an accountant

Process steps for filing 15CB and 15CA in cases where 15CB needs to be filed



• The Certificate in Form No. 15CB shall be furnished and verified electronically in accordance with the procedures, formats and standards specified by the Principal Director General of Income-tax (Systems).

• Upload of Form 15CB is mandatory 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.




Hence, 15CB shall be furnished online by chartered accountant itself with effect from 01.04.2016. To give effect the same, there is a requirement of adding CA under the Login details of Person filing Form 15CA • Client should Add CA for Form 15CB. • CA should Download the Java Utility for 15CB, Fill Up

and generate xml. • CA should log in to e-filing portal using user id • Upload the 15CB xml generated with DSC procedure. There ends the work of a CA




Step 1: Client should log in to its account and in “work list” option under main menu click “For Your Information section” and see the list of returns e-filed. Step 2: 15CB e-filed by CA will appear in first. Select the form and download the Acknowledgement No file of 15CB and also 15CB PDF file (password for PDF file is PAN & DOB/DOI) Step 3: Then under “'e-file” option select “Prepare and Submit online forms other than ITR” Select 15CA in it.




Step 4: Client to validate the DSC signature file and on choosing the DSC file it will ask for which Part of 15CA to be chosen Part -A/ B/ C/ D. Step 5: For options of C &D 15CB of CA is required. So if C / D is selected it will ask for the 15CB e-filed acknowledgement no. Step 6: On entering the 15CB e-filed acknowledgement no, 15CA is populated fill the necessary details then submit. Step 7: Finally under “My Account” section in “View” option one can see the 15CA e-filed.



This write up is intended to start academic discussion on few significant interpretations under Income Tax Act, 1961 as well as FEMA and RBI regulations. It is not intended to be a professional advice and should not be relied upon for real time professional facts. Readers are advised to refer relevant provision of law before applying or accepting any of the point mentioned above. Author accepts no responsibility whatsoever and will not be liable for any losses, claims or damages which may arise because of the contents of this write up.

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form 15ca and 15cb - a complete guide

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