Form 15CA and 15CB
Written by Sufal Bhardwaj and Utkarsh Anand Dt. March 1st, 2022
After globalization, a huge portion of our economy is dependent on import and export business. As a result, there are numerous financial transactions where payment or remittance of currency is made from India to other countries. For making such payments outside India, there are certain conditions which are required to be fulfilled. One of such requirement is submitting the form 15CA and 15CB.
As per section 195 of the Income Tax Act, 1961, any person responsible for paying to a non-resident, shall, before making such payment, deduct income tax thereon at the rates in force. Hence, when any person is required to make any payment or remit any money to non-resident, the bank will be required to check whether the tax was paid or not and if it’s certified by the Chartered Accountant or Assessing Officer, if not paid.
As per Rule 37BB, any person responsible for making payment to any non-resident person needs to furnish information about such payment to the Income-tax Department in Form 15CA. Such person is also required to get a certificate in Form 15CB from a Chartered Accountant if the aggregate payment exceeds Rs. 5 lakhs.
If the amount of remittance is not chargeable to tax, then no form is required to be furnished. If the remittance is covered under a specified exemption list, then only Part D of the Form 15CA is to be submitted. Where remittance is less than Five lakhs rupees in a particular financial year – Only Form 15CA – Part A is to be submitted. Where remittance exceeds Five lakh rupees – Form 15CA – Part C and Form 15CB is to be submitted. Where remittance exceeds Rs. 5 lakhs and a certificate under Section 195(2)/195 (3)/197 of the Income Tax has been obtained – Form 15CA – Part B is to be submitted.
What is Form 15CA?
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 is the initial phase of an effective Information Processing System which is very useful for the Income Tax Department in order to independently track the foreign remittances and their nature to determine tax liability.
The Income Tax Department has created a user friendly online facility to file information and statements. Thus, the Form 15CA is required to be filed online with the department. Authorised Dealers/ Banks are now becoming more vigilant in ensuring that such Forms are received by them before remittance is affected, since now as per the revised Rule 37BB, a duty is casted on them to furnish Form 15CA (received from the remitter) to an income-tax authority for the purpose of any proceedings under the Income-tax Act.
There are four parts of Form 15CA:
- Part A -This is required to be filed when the payment is chargeable to tax under the provision of Income Tax Act, 1961 and the payment or aggregate of such payment does not exceed Rs. Five Lakhs during the financial Year.
- Part B -This is required to be filed when the payment is chargeable to tax under the provision of Income Tax Act, 1961 and the payment or aggregate of such Payment exceed Rs. Five Lakhs during the financial Year and Certificate of lower deduction of TDS u/s 195(2)/ 195(3)/ 197 of the Act has been obtained from the Assessing officer.
- Part C -It is required to be filed when the transaction is chargeable to tax under the provision of Income Tax Act, 1961 and the payment or aggregate of such payment exceed Rs. Five Lakhs during the financial Year. Also, a certificate in Form 15CB has to be obtained from a Chartered Accountant. Whether the payment will be chargeable to tax or not will be decided on the basis of various provision of the Income Tax Act, 1961 and Double Taxation Avoidance Agreement (DTAA) between the Indian government and government of the country in which the payee is situated.
- Part D -This is required to be filed when the payment is not chargeable to tax under the provision of Income Tax Act, 1961 and the payment is in the nature other than payments referred in rule 37BB(3) by the person referred in rule 37BB(2).
What is Form 15CB?
Form 15CB is the tax determination certificate where, the Chartered Accountant examines the remittance with regard to chargeability provisions under Section 5 and 9 of the Income Tax Act, along with the provisions of Double Tax Avoidance Agreements. In form 15CB, the CA certifies details of the payment, TDS rates and TDS deduction as per Section 195 of the Income Tax Act, if any DTAA is applicable, and other details of nature and purpose of the remittance. Uploadation of Form 15CB is mandatory prior to filling Part C of Form 15CA. To prefill the details in Part C of form 15CA, the Acknowledgement Number of e- verified form 15CB should be obtained. It contains the following:
- Details and nature of payment made to a Non Resident.
- Compliance with Section 195 of the Income Tax Act.
- Rate of TDS deducted.
- Applicability of the Double Taxation Avoidance Agreement.
The forms can be found on the Income Tax e-filing portal. Where a person is already registered on the portal, he must log in with the credentials, usually the PAN number and the password. If he is not yet registered, he must click on the “Register” option on the page and then proceed to fill in all the necessary details and fields in order to complete the registration procedure.
Once login has taken place successfully, the “e-file” option is to be clicked on, wherein a dropdown list shall appear. The “Prepare and Submit Online Form (Other than ITR)” button is to be selected.
Then, ‘Form 15CA’ option is to be selected from the dropdown list and click on ‘Continue’. Upon submission, a pop-up window appears wherein the Part of the Form 15CA is to be selected based on the most suited to the present scenario. Based on which part of the Form 15CA is selected, the relevant fields will need to be filled. The common fields in the Form 15CA include:
- Name of the Remitter
- Address details
- Contact information
- Residential status of the Remitter
- Name of the recipient of the remitter
- PAN (if available)
- Details of remittance
- Details of TDS
- Verification of the form.
If the person is unable to finish the form immediately, then, there is a “Save Draft” option that throws a lifeline in that regard, so that there is no inconvenience to the person by filling up all the details again.
On completion of the form, the “Submit” button is to be selected. The next page will have the “Success” message provided the form is submitted successfully.
View and Withdrawal of Form 15CA:
- View Form 15CA – Click on “My Account” and then on “View Form 15CA”.
- Withdrawal – While on the View page, under the status column, there will be a “Withdraw Form 15CA” option. This option is exercisable only within 7 days of the submission of the form.
The “Add CA” requisite has to be completed first. Under the “My Account” tab, the “Add CA” option is to be selected. Here, the Membership Number of the CA has to be entered. The Form number is to be entered next as 15CB.
Since the CA has now been added successfully, the rest of the process may be completed by the CA himself. The user account of the CA must be registered on the site as a CA and not as a regular account.
On the “Downloads” page, the Form 15CB Utility has to be downloaded. This is because the .xml file needs to be uploaded for the successful submission of the Form 15CB. Once the download is complete, the .xml file has to be prepared offline and should be ready for uploadation.
On the site, under the “e-File” option, click on the “Upload Form” button and enter the following details:
- PAN of the Assessee
- PAN of the CA
- Form Name – 15CB
- Filing Type – Original
Next, the prepared .xml file is to be uploaded and generated through the Utility. The DSC Management Utility has to be downloaded as well. This is beneficial in uploading the Digital Signature File in order for the submission to be complete in all respects. Further, Click on the “Submit” button and await the Success page.
View the form:
- Once the Form 15CB has been uploaded and successfully submitted by the CA, the assessee may then log in and view the form under the “Work list” tab by selecting the “For Your Information” button.
- The status of the Form will be displayed as the case may be.
Guidelines for Furnishing Form 15CA
PAN No. and TAN No. allotted by the Income Tax Department shall be mentioned. TAN No. is necessary 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 of invalid PAN and/or TAN No., the Form will not be generated
No value shall be entered in the Area Code, AO Type, and Range Code & AO Number. These fields would be automatically entered by the system after validating the PAN and/or TAN After furnishing the details in Part A and Part B, a confirmation screen with the data filled up by the user would be shown. On confirming these details, a filled up Form 15CA with an acknowledgement number will be displayed. A Print out of this form should be taken, signed and submitted prior to remitting the payment
In the following cases, no submission of information is required
- The remittance is made by an individual and it does not require prior approval of Reserve Bank of India [as per the provisions of section 5 of the Foreign Exchange Management Act, 1999 (42 of 1999) read with Schedule III to the Foreign Exchange (Current Account Transaction) Rules, 2000]
- The remittance is of the nature specified in the list below:
|S.No.||Nature of Payment|
|1.||Indian investment abroad -in equity capital (shares)|
|2.||Indian investment abroad -in debt securities|
|3.||Indian investment abroad-in branches and wholly owned subsidiaries|
|4.||Indian investment abroad -in subsidiaries and associates|
|5.||Indian investment abroad -in real estate|
|6.||Loans extended to Non-Residents|
|7.||Advance payment against imports|
|8.||Payment towards imports-settlement of invoice|
|9.||Imports by diplomatic missions|
|11.||Imports below Rs.5,00,000-(For use by ECD offices)|
|12.||Payment- for operating expenses of Indian shipping companies operating abroad.|
|13.||Operating expenses of Indian Airlines companies operating abroad|
|14.||Booking of passages abroad -Airlines companies|
|15.||Remittance towards business travel.|
|16.||Travel under basic travel quota (BTQ)|
|17.||Travel for pilgrimage|
|18.||Travel for medical treatment|
|19.||Travel for education (including fees, hostel expenses etc.)|
|21.||Construction of projects abroad by Indian companies including import of goods at project site|
|22.||Freight insurance – relating to import and export of goods|
|23.||Payments for maintenance of offices abroad|
|24.||Maintenance of Indian embassies abroad|
|25.||Remittances by foreign embassies in India|
|26.||Remittance by non-residents towards family maintenance and savings|
|27.||Remittance towards personal gifts and donations|
|28.||Remittance towards donations to religious and charitable institutions abroad|
|29.||Remittance towards grants and donations to other Governments and charitable institutions established by the Governments.|
|30.||Contributions or donations by the Government to international institutions|
|31.||Remittance towards payment or refund of taxes.|
|32.||Refunds or rebates or reduction in invoice value on account of exports|
|33.||Payments by residents for international bidding.|
Sufal Bhardwaj and Utkarsh Anand