Form 15CA & 15CB
CA Jugal Gala
DVS Advisors LLPIndia-Singapore-London-Dubai-Malaysia-Africa
www.dvsca.com
Credits and AcknowledgmentsJugal Gala
Bharathi Priya R D
Presentation Schema
Purpose and Rationale Overview
Parts and Contents of Form 15CA
Procedure for Filing Form 15CA
Withdrawal of Form 15CA
Procedure for filing Form 15CA
Form 15CB and its Contents
Procedure for Filing Form 15CB
Exemptions from Filing
Authorised Dealer and Form
15CCPenal Provisions
Caveats, Suggestions and Practical Aspects
Purpose
Any person responsible for paying to a non-resident including a foreign company
Any sum whether or not chargeable to tax under the provisions of Income Tax Act
Shall furnish such information in Form 15CA and Form 15CB (only Part C) - Rule 37BB
Rationale
Tool for collecting information in relation to income chargeable to tax in the hands of non-resident
Effective Information Processing System which may be utilised by the Income Tax Department(“ITD”) to track foreign remittances
Based on the details, ITD can initiate any proceedings under Income-tax act
Overview
• Assessee (the remitter) has to submit this form mandatorily• Authorised Dealer (“AD”) need this form before they make any
remittance to the non-resident on behalf of the assesseeForm 15CA
• An Accountant must certify the correctness of details present in Part C of Form 15CA
• Before filing Form 15CA, this form, duly certified by an Accountant, must be filed
Form 15CB
Parts of Form 15CA
Form 15CA
Part A
If remittance is chargeable totax and the payment oraggregate of such paymentsduring the financial year(“FY”) is =< Rs. 5 lakhs
Part B
If remittance is chargeableto tax and payment oraggregate of suchpayments during the FY is> Rs. 5 lakhs and alower/no withholdingcertificate has been issued
Part C
If remittance is chargeableto tax and payment oraggregate of such paymentsduring the FY is > Rs. 5 lakhsand a certificate in Form15CB has been obtained
Part D
If remittance isnot chargeableto tax
Contents of Form 15CA
Details of Remitter Details of Remittee Details of Remittance Bank details of the Remitter
1. Name2. PAN (if available)3. TAN (if available)4. Address, email,phone number5. Principal place ofbusiness and warddetails (For Part C)6. Status (Company/Firm/ Individual, etc.)7. Residential status
1. Name2. PAN (if available)3. Address, email,phone number4. Status (For Part C)4. Principal place ofbusiness (For Part C)4. Country ofRemittee
1.Amount payable beforeTDS in Indian currency &in foreign currency (ForPart B & C)2.Aggregate amount ofremittances (includingproposed) during the FY3.Proposed Date ofremittance4.Nature of remittance5.Purpose code as per RBI6.Amount and rate of TDS7.Date of deduction
1.Name and branchof the bank2.BSR code of thebank (only for Part B& C)
Additional Contents (For Part B & C)
Details of Assessing Officer (“AO”) (Part B&C)
Details of Order / Certificate issued (Part B & C)
Details of Accountant (Part C)
1. Name of AO2. Designation of AO
1. Section under which order/certificate has been issued2.Date of Order/Certificate3.Order / Certificate number
1.Name of the Accountant2.Name of the Proprietorship/ firm of the accountant3.Address4.Registration Number5.Date of Certificate6.Certificate Number
Part C contains Section B which gets automatically filled in onceacknowledgement number of Form 15CB is keyed in
Part D, relating to any sum not chargeable to tax, only contains thebasic details of remitter, remittee, remittance and bank
Procedure for filing Form 15CA
Log on to E-filing portal @ www.incometaxindiaefiling.gov.in
Contd…
Click on ‘e-File’ tab and select ‘Income Tax Forms’
Contd…Select “Form 15CA” and click “Prepare & Submit Online”
Contd…
Select the type of ‘Form 15CA’ whether Part A, B, C or D To fill Part C of Form 15CA, the acknowledgment numberof e-Filed Form 15CB will be required
Details in Form 15CA can be saved and re-used later
Withdrawal of Form 15CAForm 15CA can be withdrawn within 7 days of submission of Form 15CA
After logging on income tax portal, View Forms – Form 15CA, Click “Withdraw Form 15CA” link, a confirmation page shall appear, then click ‘confirm withdrawal’
After withdrawal, status of Form 15CB shall be changed from “consumed” to “withdrawn” (under professional login –View Form 15CB)
Form 15CB
Form certified by an accountant
That the appropriate amount of tax has been paid
While making proposed remittance to a non-resident
Contents of Form 15CB
1. Name and2. Address ofthe beneficiaryof remittance
1.Country to which remittance is made and itsCurrency2.Amount payable in foreign and Indian currency3.Proposed date of Remittance4. Nature of remittance as per agreement / document5. Grossed up remittance (explained in example later)6.Amount of TDS in foreign and Indian currency7.Rate of TDS as per Income Tax Act or as per DTAA8.Actual amount of remittance after TDS in foreigncurrency9.Date of deduction of tax at source
1.Name and branch ofthe bank2.BSR code of the bank
Details of Remitter Details of RemittanceBank details of the
Remitter
Contd..
Details of Taxability as per Income Tax Act Details of Applicability of DTAA
1.Taxability under the provisions of Incometax Act (without considering DTAA)2.Is remittance is chargeable to taxIf yes,(a) the relevant section of the Act underwhich the remittance is covered(b) the amount of income chargeable to tax(c) the tax liability(d) basis of determining taxable income andtax liabilityIf no – reasons
1.If income is chargeable to tax in India and anyrelief is claimed under DTAAIf yes,2.whether Tax Residency Certificate (“TRC”) isobtained from the recipient of remittance3.Relevant DTAA and corresponding article4.Taxable income as per DTAA and tax liability asper DTAA in Indian Rs.5. Nature of remittance (explained in next slide)
Nature of Remittance
In case of other remittances, specify nature of remittance If taxable in India as per DTAA - rate of TDS required to be deducted in terms of such article of the applicable DTAA
If not taxable in India as per DTAA - furnish brief reasons, specifying relevant article of DTAA
If remittance is on account of capital gains
Amount of long term capital gains and short term capital gains Basis of arriving at taxable income
If remittance is on account of business incomeIf it is liable to tax in India, the basis of arriving at the rate of
deduction of taxIf not liable to tax -furnish brief reasons, specifying relevant
article of DTAA
If the remittance is for royalties, fee for technical services, interest, dividend, etc,(not connected with permanent establishment)
Article of DTAA % of TDS required to be deducted in terms of such article of the applicable DTAA
Definition of Accountant – Sec 288(2)A Chartered Accountant, being a member of Institute of CharteredAccountants of India, who holds a valid certificate of practice (COP)
But does not include
In case of a company, a person disqualified from being an auditor as per Companies Act
In any other case,i. The assessee himself or the members in case of assessee being AOP, HUF or Firmii. In case of trust or institution, the author or trustee or any person making substantial contributioniii. In case of any other person other than i and ii, a person competent to verify the returniv. Any relative of person referred to in point i, ii & iii abovev. An officer or employee of the assesseevi. An individual who is a partner or who is in employment of an officer or employee of the assesseevii. An individual who or his relative or partner –
• Holds interest/security in the assessee, provided relative can hold upto Rs.1,00,000• Is indebted to the assessee, provided relative can be indebted upto Rs. 1,00,000• Has given guarantee or provided security to the assessee for a 3rd party, provided relative may guarantee or
provide security for amount upto Rs. 1,00,000viii. A person, directly or indirectly having business relationship with the assessee of the specified natureix. A person convicted for offence involving fraud and a period of 10 years has not elapsed from date of conviction
Example on Grossed Up Remittance
Particulars Amount (in Rs.)
Amount payable to non-resident (net of tax) 100
Tax rate applicable (Assumed) 20%
Gross-up income: 100 * 100 / (100-20) 125
Tax payable (Rs.125*20%) 25
Procedure for Filing Form 15CB- Accountant has to log-in using his professional user ID and password
- Click e-file and type PAN of assessee and accountant’s PAN- Select Form 15CB and upload XML file
Form 15CB needs to be digitally signed – Download ‘ITD e-filing DSC Management Utility’ from the abovementioned link, generate signature file and follow the instructions, attach the generated signature file as above
To prepare XML file, download Form 15CB from www.incometaxindiaefiling.gov.in/downloads/ - Other Form Preparation Software – Form 15CB - Fill in the required details and generate XML
Exemptions from Filing of Form 15CA / 15CB – Rule 37BB(3)
Filing of Form 15CA / 15CB is not required if
Remittance for current account transaction, not chargeable to income tax, made by an Individual whichdoes not require prior approval from RBI or
Remittance, not chargeable to income tax, is of the nature of specified list of items
Specified List of Items (For Exemption)
S.No Purpose Code as per RBI
Nature of Payment
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 invoice
9 S0103 Imports by diplomatic missions
10 S0104 Intermediary trade
11 S0190 Imports below Rs.5,00,000 - (For use by Exchange Control Department (ECD) offices)
Contd..S.No Purpose Code as per
RBINature of Payment
12 S0202 Payment for operating expenses of Indian shipping companies operatingabroad
13 S0208 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 ofgoods at project site
22 S0602 Freight insurance - relating to import and export of goods
Contd..S.No Purpose Code as per
RBINature of Payment
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 andcharitable 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
Authorised Dealer
• Printout of the said form shall be submitted to the AD, priorto remitting the payment – Rule 37BB(4)
If Form 15CA is furnished electronically and digitally signed
• Signed printout of the said form shall be submitted to theAD, prior to remitting the payment – Rule 37BB(4)
If Form 15CA is furnished electronically and not digitally signed
• Acknowledgement of Form 15CB filedForm 15CB - Rule 37BB (6)
An income-tax authority may require the AD to furnish the signed printout of Form No.15CA for purpose of any proceedings – Rule 37BB (5)
Form 15CC – Rule 37BB(7)AD should furnish all details of remittances made
In quarterly statement for each quarter of the financial year electronically with digital signature
To the Principal Director General of Income-tax (DGIT) (Systems) or the person authorised by such person
Within fifteen days from the end of the quarter
Authorised Dealer means a person authorised by RBI to deal in foreign exchange or foreignsecurities, as a money changer or off-shore banking unit or any other manner as deemed fit
Contents of Form 15CC
Name and address of the AD
PAN number of the AD
Name and PAN of the remitter
Name and PAN of the remittee
Amount of Remittance
Date of remittance
Country to which remittance is made and Purpose Code
Penal Provisions
• Penalty of Rs. 1,00,000 (no specified section however, it is mentioned in an official document issued by ITD titled
“Penalties under Income-tax Act”)
Default in relation to Form 15CA/15CB
• Penalty of Rs.10,000 for each incorrect form certifiedWhere an Accountant furnishes
incorrect information in Form 15CB (Sec 271J)
Caveats
Form 15CA/15CB shall be required for reimbursement of expenses or payment on account of cost sharing
Transfer from NRO to NRE account would mandate Form 15CA/15CB
Payment towards imports, freight insurance, etc. may be chargeable to tax (on account of PE or otherwise), thus, Form 15CA/15CB shall be required
Form 15CA/15CB shall be required even if payment is considered to be at arms’ length
Digital Signature should be made optional for filing of Form 15CA for all types of Parts (A, B, C and D)
AD should be more aware in terms of requirement and non-requirement of Form 15CA and 15CB
In case there is no requirement of Form 15CA and 15CB to be furnished by AD Bank, it is advised to submit a self declaration (on letterhead if a company) the details about remittance and the reason why it is not taxable in India
Suggestions and Practical Aspects
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