- When a person makes any payment or remit any money to non resident, the bank will need to check whether the tax was paid or not
- There are at least 28 types of foreign remittances where you do not require any submission of Form 15CA or Form 15CB
- If the remittance or the aggregate of remittances is not higher than Rs 5 lakh in a particular financial year, you need to fill Form 15CE
Foreign remittances have tax implications, which many times is missed out inadvertently by taxpayers.
As per section 195 of the Income Tax Act, tax is required to be deducted for any sum which is taxable under the Income Tax Act. So when a person desires to make any payment or remit any money to non resident, the bank will require to check whether the tax was paid or not. If not paid; it will be checked if it is certified by the Chartered accountant or the Assessing Officer. But there are at least 28 types of foreign remittance where you do not require any submission of Form 15CA or Form 15CB.
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 starting of an effective Information Processing System which may be utilized by the Income Tax Department to independently track the foreign remittances and their nature to determine tax liability.
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.
Income Tax Department has now created online facility to file information. Thus the Form 15CA is required to be filed online with the tax department. After that, proof of online submission should be printed out. This copy is required to be given to the Bank as a proof of tax clearance from the tax department.
What is From 15CB?
Form 15 CB is Form which is required to be signed by a Chartered Accountant. This is a kind of certification regarding rates and right kind of tax paid by you. Certain details are required from Form 15CB at the time of filing Form 15CA.
At first glance it appears that Form 15CA is not required to be filled if the remittance or payment to non-resident Indian is not chargeable to tax.
As per Income Tax (Fourteenth Amendment) Rules, 2013, No reporting in Form 15CA and 15CB is to be made in case of the following nature of foreign remittances since October 2013 has been provided in Rule 37BB.
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List of payments where Form 15CA / 15CB is not required
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Purpose code as per RBI
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Nature of Payment
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S0001
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Indian investment abroad -in equity capital (shares)
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S0002
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Indian investment abroad -in debt securities
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S0003
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Indian investment abroad -in branches and wholly owned subsidiaries
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S0004
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Indian investment abroad -in subsidiaries and associates
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S0005
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Indian investment abroad -in real estate
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S0011
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Loans extended to Non-Residents
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S0202
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Payment- for operating expenses of Indian shipping companies operating abroad.
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S0208
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Operating expenses of Indian Airlines companies operating abroad
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S0212
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Booking of passages abroad -Airlines companies
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S0301
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Remittance towards business travel.
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S0302
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Travel under basic travel quota (BTQ)
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S0303
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Travel for pilgrimage
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S0304
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Travel for medical treatment
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S0305
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Travel for education (including fees, hostel expenses etc.)
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S0401
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Postal services
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S0501
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Construction of projects abroad by Indian companies including import of goods at project site
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S0602
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Freight insurance – relating to import and export of goods
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S1011
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Payments for maintenance of offices abroad
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S1201
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Maintenance of Indian embassies abroad
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S1 202
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Remittances by foreign embassies in India
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S1301
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Remittance by non-residents towards family maintenance and-savings
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S1302
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Remittance towards personal gifts anddonations
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S1303
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Remittance towards donations to religious and charitable institutions abroad
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S1304
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Remittance towards grants and donations to otherGovernmentsand charitable institutions established by the Governments.
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S1305
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Contributions or donations by theGovernmentto international institutions
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S1306
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Remittance towards payment orrefundof taxes.
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S1501
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Refunds or rebates or reduction in invoice value on account of exports
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S1503
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Payments by residents for international bidding”.
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Mandatory information required by a client to file a Form 15CA and 15CB
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Details of Remitter
a. Name of the remitter
b. Address of the remitter
c. PAN of the remitter
d. Principal place of business of the remitter
e. E-Mail address and phone no. of remitter
f. Status of the remitter (firm/company/other)
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Details of remittee
a. Name and status of the remittee
b. Address of the remittee
c. Country of the remittee (country to which remittance is made)
d. Principal place of the business of the remittee
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Details of the remittance
a. Country to which remittance is made
b. Currency in which remittance is made
c. Amount of remittance in Indian currency
d. Proposed date of remittance
e. Nature of remittance as per agreement (invoice copy to be asked from client)
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Bank details of the remitter
a. Name of bank of the remitter
b. Name of branch of the bank
c. BSR Code of the bank
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Others
a. Father’s name of the signing person
b. Designation of the signing person
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Documents from the remittee
a. Form 10F duly filled by the authorized person of the remittee.
b. Tax residency certificate from the remittee (tax registration of the country in which remittee is registered).
c. Certificate that the remittee does not have any permanent establishment in India.
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