Form 15CA & Form 15CB

Information Required

  • 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 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.
  • What are the 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 Remittance 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
    S0001 Indian investment abroad – in equity capital (shares)
    S0002 Indian investment abroad – in debt securities
    S0003 Indian investment abroad – in branches and wholly owned subsidiaries
    S0004 Indian investment abroad – in subsidiaries and associates
    S0005 Indian investment abroad – in real estate
    S0011 Loans extended to Non-Residents
    S0101 Advance payment against imports
    S0102 Payment towards imports – settlement of invoice
    S0103 Imports by diplomatic missions
    S0104 Intermediary trade
    S0190 Imports below Rs.5,00,000 – (For use by ECD offices)
    SO202 Payment for operating expenses of Indian shipping companies operating abroad
    SO208 Operating expenses of Indian Airlines companies operating abroad
    S0212 Booking of passages abroad – Airlines companies
    S0301 Remittance towards business travel
    S0302 Travel under basic travel quota (BTQ)
    S0303 Travel for pilgrimage
    S0304 Travel for medical treatment
    S0305 Travel for education (including fees, hostel expenses etc.)
    S0401 Postal services
    S0501 Construction of projects abroad by Indian companies including import of goods at project site
    S0602 Freight insurance – relating to import and export of goods
    S1011 Payments for maintenance of offices abroad
    S1201 Maintenance of Indian embassies abroad
    S1202 Remittances by foreign embassies in India
    S1301 Remittance by non-residents towards family maintenance and savings
    S1302 Remittance towards personal gifts and donations
    S1303 Remittance towards donations to religious and charitable institutions abroad
    S1304 Remittance towards grants and donations to other Governments and charitable institutions established by the Governments
    S1305 Contributions or donations by the Government to international institutions
    S1306 Remittance towards payment or refund of taxes
    S1501 Refunds or rebates or reduction in invoice value on account of exports
    S1503 Payments by residents for international bidding.

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