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Form 15ca & 15cb certificate – Procedure To File For a NRI

May 8, 2018

As a remitter, it would seem quite tricky and lengthy process to file for payments which are tax chargeable. Form 15CA and Form 15CB are the two forms which are required by the banks and dealers while authorizing such payments. It is very much advised to make yourself aware of all the information regarding these two forms before going ahead with making a payment to a non-resident individual or business.

 

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This article has an expressive amount of detail required for filling out these two forms –

 

  1. What is form 15CA?

This section would briefly provide you with an explanation of what form 15CA form is and why is it required.

  1. Changes in the form 15CA effective from 1st of April 2016 are below:

This section would explain you about the new update that the rules have seen regarding filling out the form 15CA.

  1. Details which are required while filling the form 15CA:

This section will list down the parts of form 15CA and briefly describe their importance and need.

  1. Step by step procedure of filling out the form 15CA:

Finally, this section will walk you through filling of the form 15CA and submission of the same on the online portal. This section will also provide you information about the other necessary forms and details that may be required while submitting the form 15CA.

  1. What action can be taken by the customer if a Bank or a Dealer demands form 15CA for the service which is not taxed chargeable?

In case, a remitter is stuck at a point where the form is not required but the bank or the dealer is asking for the same this section gives an elaborate explanation on how to proceed further.

  1. What is form 15CB?

This section describes what the form 15CB is and all additional details that are needed to fill out.

  1. Why is form 15CB required?

This section elaborates on the reason as to why the form is needed to be filled out in the first place.

  1. Information required from the client while filling out the form 15CB:

This section lists the information that is required about the client before filling out the form 15CB.

  1. Pre-requisite for filling the form 15CB:

This section provides an information about the requirements that are needed firsthand before filling out the form.

  1. Procedure to be followed while filling out the form 15CB:

This section walks you through the process of filling out the form.

  1. Last two sections elaborate on the payment list where these two forms are not required and the recent updates that have been mandated by the Government about these forms.

 

 

WHAT IS A FORM 15CA?

A remitter’s declaration, Form 15CA is used to collect information about the payments which are tax chargeable in the hands of recipients non-resident.

Form 15CA is supposed to be submitted online by an individual who is making a remittance also called a payment to a non-resident or a foreign company.

In short, this form is needed by the bank or the dealer to collect all the information there is to collect about the remitter, remittance and the party which is receiving payment.

The form is needed to be submitted by the remitter as it helps the income tax department in tracking foreign companies and their taxability. Also, it is a duty of authorized dealers or banks to ask for and ensure that such forms are submitted to them by the remitter as per the rule 37BB.

The penalty for not filing the form 15CA is Rs. 1 lakh for each non-filing of the form.

Form 15CA can be withdrawn within 7 days of its online submission. This option is open only before the payment has been made.

Before looking at the details which are required to fill the form 15CA and the steps required further, let’s look at the changes that have been introduced in the form.

 

Changes in the form 15CA effective from 1st of April 2016 are below:

Part B of the form 15CA has been further divided into two more parts that are Part B and Part C of Form 15CA.

Part C of the form 15CA is strict to be reported based on the form 15CB.

Part D of the form 15 CA has introduced a new section for reporting those transactions which are not taxed chargeable.

Furthermore to these updates, a new form has been introduced, Form 15CC, which is prescribed for the quarterly statement to be displayed by the authorized dealer in case of a foreign remittance made by him.

 

Details which are required while filling the form 15CA:

Form 15CA has 4 parts. The specific part of form 15CA is to be filled by the remitter depending upon the amount and taxability. It is advised to look minutely into all these parts and fill out only those sections which are needed for the remitted while making a payment. Other sections need not be filled out.


Part A –

The first part of the form 15CA is filling out the details if the remittance is taxable and the total value of such remittance during the financial year is less than Rs. 5 lakh.

 

Part B –

To be filled out if remittance is taxable and the total value of the remittance during the financial year is more than Rs. 5 lakhs and an ordered certificate under 195(2), 195(3) and 197 of Income-tax Act has been obtained by the remitter from the Assessing Officer.

 

Part C –

The third part needs to be filled out when the remittance is taxable and the total value of the remittance during the financial year is more than Rs. 5 lakhs and a certificate is attached to form 15CB which is obtained from an accountant as mentioned under sub-section 2 of section 288.

 

Part D –

The last part of the form 15CA needs to be filled up when the remittance is not taxable other than payments which are referred in rule 37BB(3) by the person referred to in rule 37BB(2).

Now that the required details have been explained in a neat manner let’s look at the steps which need to be followed while filling out the 15CA form.

 

 

STEP BY STEP PROCESS FOR FILLING OUT FORM 15CA:

  1. Navigate to the income tax department website, http://incometaxindiaefiling.gov.in, and log in to your account.
  1. After logging into your account click on the ‘e-file’ tab option and select the option ‘Prepare and Submit Online Form (Other than ITR)’ from under the menu drop down.
  1. Further, select the form 15CA from the drop-down menu and click on Continue option.
  1. Select the form 15CA type which applies to you from under the menu drop down.
  1. Fill out the 15CA form and click on Submit option to complete the process.

 

Do not forget to upload the form 15CB prior to filling the Part C of Form 15CA. Acknowledgment number of e-filed form 15CB need to be provided before filling the Part C of Form 15CA.

After the process is complete, you’ll receive a success message on your screen and a confirmation email in your registered email account.

 


What action can be taken by the customer if a Bank or a Dealer demands form 15CA for the service which is not taxed chargeable?

In cases such as this, the remitter can submit a declaration in form of a written note to the bank or the dealer stating the nature of the remittance and the reason as to why the service does not tax chargeable and consequently is exempted from the submission of Form 15CA.

 

 

WHAT IS A 15B CERTIFICATE?

Liability of form 15CB is ascertained and certified by obtaining a certificate from a Chartered Accountant. This certificate has been prescribed under Income-tax Act section 195(6) and is also an alternative to obtaining Tax clearance apart from a certificate from Assessing Officers.

The penalty for non-filing of the form 15CB is same as the penalty for non-filing of the form 15CA that is Rs. 1 lakh.

 

 

WHY IS 15CB CERTIFICATE REQUIRED?

This certificate has been prescribed by under the Income-tax Act and examining the form makes it clear that there is no condition or an exemption to obtain this certificate when the remittance is not tax chargeable. Form 15CB is a Tax Determination Certificate where the CA who has issued the certificate examines the remittance amount having regard to chargeability provisions under sections 5 and 9 of the Income Tax Act along with the provisions of Double Tax Avoidance Agreements with the resident country if the recipient.

It is advisable to obtain the form 15CB even when the form 15CA is not mandatory.

 

Information required from the client while filling out the form 15CB:

Below information of the client is required by the remitter while filling out the form 15CB. This information is to be filled out while filing the form.

  1. Details of the remitter like remitter’s name, address, PAN number, email address, Phone number, and status.
  1. Details of remitee such as remitee’s name and status, address, nationality and business portfolio.
  1. Details of remittance such as country to which remittance is made, currency to which remittance is made, the amount in Indian currency, proposed date and nature of the remittance as per the agreement.
  1. Bank details of the remitter like the name of the bank, bank branch and BSR code.
  1. Other additional details are also required like father’s name of the person who is signing the form and designation of the signing person.

 

 

Pre-requisite for filling the form 15CB:

Few pre-requisite details are required while filling out the form 15CB.

The taxpayer must add the Chartered Accountant in order to fill the form 15CB. Follow the below steps to add CA –

  1. Go to the e-filing website and log in using your login details. Navigate to My Account tab option and select the option Add CA.
  1. Enter the Membership Number of the CA you’re adding, select the form 15CB as Form Name and then click on Submit option.

 

After the CA has been added by the taxpayer, CA can fill the form on behalf of the taxpayer.

 

 

The registration process for Chartered Accountant

CA must be registered as a CA on the e-filing portal before filling the form 15CB on behalf of the taxpayer. Following process is only for a CA to register themselves before filling out the firm 15CB on behalf of the remitter.

 

  1. If the user is not registered as a CA on the e-filing platform then they should register themselves by clicking on the Register Yourself link present on the homepage.

 

  1. Select the option Chartered Accountant under Tax Professional option and click on the Continue button to proceed further.

 

  1. Enter all the mandatory fields and your other additional details to complete the registration process.

 

 

Procedure to be followed while filling out the form 15CB.

In order to fill the form 15CB, a CA must follow the steps given below.
Below procedure is provided step by step and walks the remitter through the whole process of filling out the 15CB form.

 

  1. Navigate to http://incometaxindiaefiling.gov.in and further click the Downloads tab option.

 

  1. Click on the option Forms(Other than ITR) tab and download the Excel or Java Utility.

 

  1. Prepare the XML file using the Java Utility.

 

  1. Login to the e-filing portal account using the provided login details and under e-file drop-down tab select the option Upload form.

 

  1. Upload the form, enter the PAN of the assessee along with the PAN of the Chartered Accountant, select 15CB as Form Name, select the type as Original while selecting Filing Type. Proceed further and click on submit once all the details are filled and all the options are selected. You’ll receive a success message and a confirmation email to your registered email account afterward.

 

  1. Digital security controls are mandatory while filling out the form 15CB.

 

 

List of payments and exceptional cases where form 15CA and form 15CB are not required

There is totally 33 nature of remittance where form 15CA and form 15CB are not required to be filled out. These all 33 remittances are listed below for you to become aware when you would not be needing the forms to fill out.

  1. Indian investment abroad in equity capital (shares).

 

  1. Indian investment abroad in debt securities.

 

  1. Indian investment abroad in branches and wholly owned subsidiaries

 

  1. Indian investment abroad in subsidies and associates.

 

  1. Indian investment in real estate abroad.

 

  1. Loans are given to Non-residents of India.

 

  1. Payment for operating expenses of Indian shipping companies operating abroad.

 

  1. Operating expenses of Indian Airlines companies operating abroad.

 

  1. Booking of passages abroad of Airlines companies.

 

  1. Advance payments against imports.

 

  1. Payments towards imports in settlement of the invoice.

 

  1. Imports by diplomatic missions.

 

  1. Imports which are below Rs. 5 lakhs for use by early childhood development offices.

 

  1. Postal services.

 

  1. Travel for pilgrimage.

 

  1. Travel for medical treatment

 

  1. Travel for education which includes fees and hotel expenses.

 

  1. Remittance by foreign embassies in India.

 

  1. Travel under basic quota.

 

  1. Construction of projects abroad by Indian companies including import of goods at the project site.

 

  1. Freight insurance which is relating to import and export of goods.

 

  1. Remittance by non-residents towards family maintenance and savings.

 

  1. Remittance towards personal gifts and donations.

 

  1. Remittance towards donations to religious and charitable institutions abroad.

 

  1. Remittance towards grants and donations to other Governments and charitable institutions established by the Government.

 

  1. Contributions or donations by the government to international institutions.

 

  1. Remittance towards payment or refund of taxes.

 

  1. Refunds or rebates or reduction in invoice value on account of exports.

 

  1. Payments by residents for international bidding

 

  1. Intermediary trade

 

  1. Remittance towards business travel

 

  1. Payments for maintenance of offices abroad

 

  1. Maintenance of Indian embassies abroad

 

 

Recent updates related to submission of form 15CA and 15CB

Rules of submission of forms 15CA and 15CB are changed by income tax department. These rules have now been revoked and do not require the submission of these two forms in any of the cases. In case the bank or the dealer is still asking you to submit the form you can follow the process which is presented to you in the above section.

 

  1. These two forms are not required to be furnished by an individual for remittance in the case which does not require RBI’s approval.

 

  1. List of payment mentioned under the Rule 37BB of specific nature which does not require submitting of these two forms has been expanded from 28 to 33 which also includes payments of import.

 

  1. Form 15CB is only required when the payment to make to a non-resident individual and the payment amount is exceeding Rs. 5 lakhs.

 

 

All the above details regarding the form 15CA and 15CB furnished here are based on the recent rules and updates that are rolled by the Government on 1st of April 2016.

 

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