FORM 15CA / 15CB FILING
Foreign remittances to a non-resident often have tax implications. Section 195 of the Income Tax Act directs tax deduction for any taxable sum under the Income Tax Act. Therefore, for any payment or remittance made to a non-resident, the bank would check whether or not tax is paid. If the tax is not paid, it will be checked whether a Chartered accountant or an Assessing Officer has certified it.
What are Form 15CA and 15CB?
Form 15CA is the Declaration of the Remitter. This declaration is made by the person remitting the money and informing about the tax deduction from any payment made to the non-resident. The primary intention behind the tax deduction at source followed by their reporting ensures timely collection of taxes. Using this effective Information Processing System, the Income Tax Department can track the source and details of foreign remittances for determining their tax liability. The revised Rule 37BB mandates financial institutions to furnish Form 15CA provided by the remitters to the income tax authority for usage in any proceedings as per the Income Tax Act.
Based on different situations, there are 4 sections of Form 15CA.
- Section A: Remitters must fill section A of the Form 15CA when the total payment made by the remitter to the non-resident during a particular financial year is less than Rs 5 lacs.
- Section B: When the total sum exceeds Rs 5 lacs, remitters need to fill section B of Form 15CA. For this, a certificate or order from the Assessing Officer is necessary.
- Section C: With payments exceeding Rs 5 lacs in a particular financial year, the remitter must acquire Form 15CB or the Tax Determination Certificate from an authorized CA and enter the related information in Section C.
- Section D: When the payments made by the remitter are not taxable under the law, the related information is entered in Section D.
Form 15CB is certification regarding rates and type of tax paid by the remitter. It can be ascertained and certified by obtaining the Certificate from a Chartered Accountant. Acting as an alternate channel of obtaining Tax clearance, this certificate has been prescribed under Section 195(6) of the Income-tax Act.
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Documents required from the client for Form 15CA and 15CB
Details of Remitter
- Name of the Remitter
- Address of the Remitter
- PAN of the Remitter
- Principal Place of Business
- E-mail Address and Phone No. of Remitter
- Status of the Remitter (Firm/ Company/ Other)
Details of Remittee
- Name and Status of the Remittee
- Address of the Remittee
- Principal Place of Business
- Country of the Remittee
Details of Remittance
- Country to which the Remittance is made
- Amount of Remittance in Indian Currency
- Proposed Date of Remittance
- Nature of Remittance as per Agreement (Invoice Copy)
Bank Details of Remitter
- Name and Bank of Remitter
- Name of Branch of the Bank
- BSR Code of the Bank