Making payments outside of India requires certain compliance, one among those compliance is the submission of Form 15CA and 15CB. These must be submitted under various scenarios.
Foreign Remittances attract tax implications which are ignored by most of the taxpayers. Section 195 of the Income Tax Act 1961 mandates the deduction on tax on any payments made to non-residents. 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.
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.
Form 15CB is a form which is required to be certified by a Chartered Accountant. A CA certifies the details of payment, TDS rate, TDS deduction etc. For upload Part C of Form 15CA, an Acknowledgement number of Form 15CB is mandatory.
Remittances which do not require Form 15CA and Form 15CB
The following payments or remittances does not require the furnishing of Form 15CA or 15CB.
- If the remittance is not related to any business transaction or the remitter is not claiming it as business expenditure, then the resident individual is not required to furnish form 15CA or form 15CB
- The resident individual is not required to furnish form 15CA or form 15CB if the remittance or payment is mentioned in rule 37BB (28 payments).
Information required to be filed in Form 15CA and Form 15CB
The following information is required to be submitted in Form 15CA and Form 15CB
- Details of Remitter like name, address, PAN, principal place of business, email, mobile no and status of the remitter i.e., individual, firm, company etc
- Details of Remittee like name, address, country to which remittance made and principal place of business of the remittee and status
- Details of Remittance: Country to which remittance made, currency in which remittance made, proposed date, amount of remittance and nature of remittance.
- Bank Details of the remitter
- Any other details like father’s name, designation of signing person etc
- Documents like Tax Residency Certificate from the remittee or No Permanent Establishment declaration etc
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