Introduction: The Central Board of Direct Taxes (CBDT) has introduced significant changes in the realm of tax regulations, amending rule 37BB and introducing a new Form No. 15CD. These changes primarily pertain to the furnishing of a quarterly statement by a unit of an International Financial Services Centre (IFSC) in respect of remittances. The effective date of these amendments is set for the 1st day of January, 2024.
Detailed Analysis: The CBDT has issued Notification No. 89/2023-Income Tax on October 16, 2023, to detail the amendments to the Income-tax Rules, 1962. These amendments are designed to facilitate the process of reporting remittances for units of IFSCs and ensure compliance with tax regulations.
The key changes in this amendment include:
- Introduction of Form No. 15CD: A new e-Form named “Form No. 15CD” is introduced. This form is to be used by units of IFSCs to report their remittances. The form includes detailed fields for providing information about the unit, remittee, remitter, currency details, and more.
- Quarterly Statement Requirement: Units of IFSCs must now furnish a quarterly statement for each quarter of the financial year. This statement covers all remittances, and it must be submitted within fifteen days from the end of the respective quarter. The reporting must be done electronically under digital signature.
- Role of Principal Director General of Income-tax (Systems) and Director General of Income-tax (Systems): These authorities will specify the procedures, formats, and standards for the furnishing and verification of various forms, including Form No. 15CA, Form No. 15CB, Form No. 15CC, and the newly introduced Form No. 15CD.
- Explanation: The notification includes an explanation that defines terms such as “authorised dealer,” “International Financial Services Centre,” and “Unit” for clarity and interpretation.
It’s noteworthy that the changes outlined in this amendment will take effect from January 1, 2024. All units of IFSCs must ensure compliance with these new reporting requirements.
Conclusion: The CBDT’s amendment to rule 37BB and the introduction of Form No. 15CD represent a significant step in ensuring proper reporting and compliance in the realm of tax regulations for International Financial Services Centre units. The effective date of January 1, 2024, marks the beginning of these changes, and all relevant entities should take proactive steps to adapt to the new reporting format and meet their compliance obligations. The CBDT’s move is in line with its objective to streamline and standardize the tax reporting process, ensuring transparency and adherence to the law.
MINISTRY OF FINANCE
(DEPARTMENT OF REVENUE)
(CENTRAL BOARD OF DIRECT TAXES)
Notification No. 89/2023-Income Tax |Dated: 16th October, 2023
G.S.R. 740(E).—In exercise of the powers conferred by sub-section (6) of section 195 read with section 295 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 1962, namely:─
1. Short title and commencement.– (1) These rules may be called the Income-tax Amendment (Twenty-fifth Amendment), Rules, 2023.
(2) They shall come into force with effect from the 1st day of January, 2024.
2. In the Income-tax Rules, 1962 (hereinafter referred to as the principal rules), in rule 37BB,–
(a) in sub-rule (3), after clause (i), the following clause shall be inserted, namely:-
“(ia) the remittance is made by a Unit of an International Financial Services Centre referred to in subsection (1A) of section 80LA; or”;
(b) in sub-rule (4),–
(I) in clause (i), after the words and brackets “Principal Director General of Income-tax (Systems)”, the words and brackets “or the Director General of Income-tax (Systems)” shall be inserted;
(II) in clause (ii), after the words and brackets “Principal Director General of Income-tax (Systems)”, the words and brackets “or the Director General of Income-tax (Systems)” shall be inserted;
(c) in sub-rule (6), after the words and brackets “Principal Director General of Income-tax (Systems)”, the words and brackets “or the Director General of Income-tax (Systems)” shall be inserted;
(d) for sub-rule (7), the following sub-rule shall be substituted, namely:-
“(7) A quarterly statement, for each quarter of the financial year shall be furnished in respect of all remittances referred to in sub-rules (1), (2) and sub-rule (3) by,–
(i) the authorised dealer in Form No. 15CC;
(ii) a Unit of an International Financial Services Centre referred to in sub-section (1A) of section 80LA, responsible for paying to a non-resident, not being a company, or to a foreign company, in Form No. 15CD,
to the Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems) or the person authorised by the Principal Director General of Income-tax (Systems) or the 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) or the Director General of Income-tax (Systems) under sub-rule (8).”;
(e) for sub-rule (8), the following sub-rule shall be substituted, namely:-
“(8) The Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems) shall specify the procedures, formats and standards for the purposes of furnishing and verification of Form No. 15CA, Form No. 15CB, Form No. 15CC and Form No. 15CD 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 sub-rule (7).”;
(f) for the Explanation, the following Explanation shall be substituted, namely:-
‘Explanation.— For the purposes of this rule,–
(i) “authorised dealer” means a person authorised as an authorised dealer under sub-section (1) of section 10 of the Foreign Exchange Management Act, 1999 (42 of 1999);
(ii) “International Financial Services Centre” shall have the same meaning as assigned to it in clause (q) of section 2 of the Special Economic Zones Act, 2005 (28 of 2005);
(iii) “Unit” shall have the same meaning as assigned to it in clause (zc) of section 2 of the Special Economic Zones Act, 2005 (28 of 2005).’.
3. In the principal rules, in Appendix-II, after Form No. 15CC, the following Form shall be inserted, namely:-
“Form No. 15CD
(See rule 37BB)
[e-Form]
Quarterly statement to be furnished by a unit of an International Financial Services Centre, as referred to in sub- section (1A) of section 80LA, in respect of remittances, made for the quarter of………………………. of…………… (Financial Year)
1. Name of the Unit:
2. Permanent account number of the Unit:
3. Tax deduction/collection account number of the Unit:
4. Status of the Unit:
5. Residential status of the Unit:
6. Complete address, email and phone number of the Unit:
7. Details of remittances made:
Sl. No. |
Details of the remitter, if different from the Unit referred in 1 above |
Name of the remittee |
Permanent account number# or Aadhar# Number of the remittee |
Complete address, email# and phone number# of the remittee |
Country of which the remittee is resident# |
Country to which remittance is made |
Date of remittance |
Amount of
|
Nature of remittance |
Purpose
|
|||
Name of the remitter |
Permanent account number of the remitter |
Country |
Currency |
In foreign Currency |
In Indian Rs. |
||||||||
Verification
I,____________ (full name in block letters), son/daughter of………………………. solemnly declare that to the best of my knowledge and belief, the information given above are correct and complete.
and/or
(applicable in case where the Unit referred in 1 is the remitter)
I/We*, ______________ (full name in block letters), son/daughter of _______________________ in the capacity of ___________________ (designation) solemnly declare that the information given above is true to the best of my/our* knowledge and belief and no relevant information has been concealed. In a case where it is found that the tax actually deductible on the amount of remittance has not been deducted or after deduction has not been paid or not paid in full, I/We* undertake to pay the amount of tax not deducted or not paid, as the case may be, along with the interest due. I/We* shall also be subject to the provision of penalty for the said default as per the provisions of the Income-tax Act, 1961.
I/We* further undertake to submit the requisite documents for enabling the income-tax authorities to determine the nature and amount of income of the recipient of the above remittance as well as documents required for determining my/our* liability under the Income-tax Act as a person responsible for deduction of tax at source.
Place:
Signature: ……………………………………….
Date:
Name and Designation: ……………………..
# If available
$ If applicable
* Delete whichever is not applicable”.
[Notification No. 89/2023/ F.No.370142/36/2023-TPL]
SOURABH JAIN, Under Secy.
Note. -The principal rules were published in the Gazette of India, Extraordinary, Part-II, Section 3, Sub-section (ii) vide notification number S.O. 969(E), dated the 26th March, 1962 and was last amended vide notification number G.S.R. 728(E), dated 10th October, 2023.
15cd to be filed under digital signature in which site ?