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HomeIncome TaxApplicability of Form 15CA & 15CB

Applicability of Form 15CA & 15CB

What is Form 15CA?

Form 15CA is a declaration of remitter used as a tool for collecting information in respect of payments that are chargeable to tax in the hands of the recipient non-resident. This is starting of an effective information processing system that may be utilized by the Income-tax Department to independently track the foreign remittances and their nature to determine tax liability.

What is Form 15CB?

Form 15CB is required to be signed by a Chartered Accountant. This is a kind of certification regarding rates and the right kind of tax paid by you. Certain details are required from Form 15CB at the time of filing Form 15CA. Chargeability can be ascertained and certified by obtaining a certificate known as Form 15CB from a Chartered Accountant.

Legal Provisions:

Section 195(6)

The person responsible for paying to a non-resident, not being a company, or to a foreign company, any sum, whether or not chargeable under the provisions of this Act, shall furnish the information relating to the payment of such sum, in such form and manner, as may be prescribed*.

*As per the Income Tax Rule 1962, we have to refer to Rule 37BB for a detailed study of the topic.

15CA and 15CB

What is Rule 37BB?

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  • The person responsible for paying to a non-resident, not being a company, or to a foreign company, any sum chargeable under the provisions of the Act, shall furnish the following, namely:

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    • The information in Part A of Form No.15CA, if the amount of payment or the aggregate of such payments, as the case may be, made during the financial year does not exceed five lakh rupees;
    • Payments other than the payments referred to in clause (i), the information
    • In Part B of Form No.15CA after obtaining a certificate from the Assessing Officer under section 197; or an order from the Assessing Officer under sub-section (2) or sub-section (3) of section 195.
    • In Part C of Form No.15CA after obtaining a certificate in Form No. 15CB from an accountant as defined in the Explanation below sub-section (2) of section 288. (2)

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  • The person responsible for paying to a non-resident, not being a company, or to a foreign company, any sum which is not chargeable under the provisions of the Act, shall furnish the information in Part D of Form No.15CA.
  • Notwithstanding anything contained in sub-rule (2), no information is required to be furnished for any sum which is not chargeable under the provisions of the Act, if, —

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    • 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; or
    • The remittance is of the nature specified in column (3) of the specified list below.
Recommended Reads: 

Sl. No. Purpose code as per RBI Nature of payment
(1) (2) (3)
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 S0101 Advance payment against imports
8 S0102 Payment towards imports – settlement of an invoice
9 S0103 Imports by diplomatic missions
10 S0104 Intermediary trade
11 S0190 Imports below Rs.5,00,000 – (For use by ECD offices)
12 SO202 Payment for operating expenses of Indian shipping companies operating abroad
13 SO208 Operating expenses of Indian Airlines companies operating abroad
14 S0212 Booking of passages abroad – Airlines companies
15 S0301 Remittance towards business travel
16 S0302 Travel under basic travel quota (BTQ)
17 S0303 Travel for pilgrimage
18 S0304 Travel for medical treatment
19 S0305 Travel for education (including fees, hostel expenses, etc.)
20 S0401 Postal services
21 S0501 Construction of projects abroad by Indian companies including import of goods at the project site
22 S0602 Freight insurance – relating to import and export of goods
23 S1011 Payments for maintenance of offices abroad
24 S1201 Maintenance of Indian embassies abroad
25 S1202 Remittances by foreign embassies in India
26 S1301 Remittance by non-residents towards family maintenance and savings
27 S1302 Remittance towards personal gifts and donations
28 S1303 Remittance towards donations to religious and charitable institutions abroad
29 S1304 Remittance towards grants and donations to other Governments and charitable institutions established by the Governments
30 S1305 Contributions or donations by the Government to international institutions
31 S1306 Remittance towards payment or refund of taxes
32 S1501 Refunds or rebates or reduction in invoice value on account of exports
33 S1503 Payments by residents for international bidding.

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  • The information in Form No. 15CA shall be furnished,

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    • electronically under digital signature in accordance with the procedures, formats, and standards specified by the Principal Director General of Income-tax (Systems) under sub-rule (8) and thereafter printout of the said form shall be submitted to the authorized dealer, prior to remitting the payment; or
    • electronically in accordance with the procedures, formats, and standards specified by the Principal Director General of Income-tax (Systems) under sub-rule (8) and thereafter signed printout of the said form shall be submitted to the authorized dealer, prior to remitting the payment.

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  • An income-tax authority may require the authorized dealer to furnish the signed printout of Form No.15CA referred to in clause (ii) of sub-rule (4) for the purposes of any proceedings under the Act.
  • 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) under sub-rule (8).
  • The Authorised Dealer shall furnish a quarterly statement for each quarter of the financial year in Form No.15CC to the Principal Director General of Income-tax (Systems) or the person authorized by the Principal Director General of Income-tax (Systems) electronically under digital signature within fifteen days from the end of the quarter of the financial year to which such statement relates in accordance with the procedures, formats, and standards specified by the Principal Director General of Income-tax (Systems) under sub-rule (8).
  • The Principal Director General of Income-tax (Systems) shall specify the procedures, formats, and standards for the purposes of furnishing and verification of Form 15CA, Form 15CB, and Form 15CC and shall be responsible for the day-to-day administration in relation to the furnishing and verification of information, certificate and quarterly statement in accordance with the provisions of sub-rules (4), (6) and (7).

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For the purposes of this rule ‘authorized dealer’ means a person authorized as an authorized dealer under sub-section (1) of section 10 of the Foreign Exchange Management Act, 1999 (42 of 1999).]

Example

Amount of Remittance Chargeable to Income Tax Nil or Lower Deduction Certificate No RBI Approval Required / Covered in 33 Items list stated above Form 15CA Form 15CB
3,00,000 No Yes/No Yes No No
4,00,000 Yes Yes/No No Yes, Part A No
4,00,000 No Yes/No No Yes, Part D No
6,00,000 Yes Yes No Yes, Part B No
6,00,000 Yes No No Yes, Part C Yes
6,00,000 No Yes/No No Yes, Part D No
8,00,000 No Yes/No Yes No No

 

Vikas TaxClue
Vikas Sharmahttp://taxclue.in
A writer by passion. Reading and traveling in my free time enhances my creativity in work. I enjoy exploring my creative side, and so I keep myself engaged in learning new skills.

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