When it comes to filing taxes, it is not only individuals who need to ensure that all the proper procedures are followed and forms are submitted. 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. Making payments outside India requires certain compliances. One such compliance is to submit Form 15CA and 15CB. Banks and financial institutions have rules that must be followed, which helps the income tax department to determine the taxable amounts of NRI’s. Foreign remittances have tax implications, which may be 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 checking 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.

Defining Form 15CA

Form 15CA is a declaration of remitter 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. Authorized 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. 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. This form helps Income Tax Department in tracking foreign remittances & their taxability. As per Rule 37BB, it is a duty of authorized dealers /banks to ensure that such forms are received by them from the remitter.

Defining Form 15CB

Form 15 CB 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. Chargeability can be ascertained and certified by obtaining a certificate known as Form 15CB from a Chartered Accountant. This certificate has been prescribed under section 195(6) of the Income Tax Act and is an alternate channel of obtaining tax clearance apart from certificate from Assessing Officer.

Changes in the requirement of filling the forms:

Below mentioned are the changes in the requirement of filling the forms:

  • No Form 15CA and 15CB will be required to be furnished by an individual for remittance which does not require RBI approval under its Liberalized Remittance Scheme (LRS).
  • The list of payments of specified nature under Rule 37 BB where submission of Forms 15CA and 15CB is not required has been expanded from 28 to 33.
  • A CA certificate (Form No. 15CB in this case) will be required to be furnished only in case of payments made to non-residents which are chargeable to tax and the amount of payment during the year exceeds INR 5 lakhs.

List of payments where Form 15CA / 15CB is not required

There are 33 types of foreign remittances where you do not require any submission of Form 15CA or Form 15CB as mentioned below:

S. No. Nature of Payment
1 Indian investment abroad -in equity capital (shares)
2 Indian investment abroad -in debt securities
3 Indian investment abroad-in branches and wholly owned subsidiaries
4 Indian investment abroad -in subsidiaries and associates
5 Indian investment abroad -in real estate
6 Loans extended to Non-Residents
7 Advance payment against imports
8 Payment towards imports-settlement of invoice
9 Imports by diplomatic missions
10 Intermediary trade
11 Imports below Rs.5,00,000-(For use by ECD offices)
12 Payment- for operating expenses of Indian shipping companies operating abroad.
13 Operating expenses of Indian Airlines companies operating abroad
14 Booking of passages abroad -Airlines companies
15 Remittance towards business travel.
16 Travel under basic travel quota (BTQ)
17 Travel for pilgrimage
18 Travel for medical treatment
19 Travel for education (including fees, hostel expenses etc.)
20 Postal Services
21 Construction of projects abroad by Indian companies including import of goods at project site
22 Freight insurance – relating to import and export of goods
23 Payments for maintenance of offices abroad
24 Maintenance of Indian embassies abroad
25 Remittances by foreign embassies in India
26 Remittance by non-residents towards family maintenance and savings
27 Remittance towards personal gifts and donations
28 Remittance towards donations to religious and charitable institutions abroad
29 Remittance towards grants and donations to other Governments and charitable institutions established by the Governments.
30 Contributions or donations by the Government to international institutions
31 Remittance towards payment or refund of taxes.
32 Refunds or rebates or reduction in invoice value on account of exports
33 Payments by residents for international bidding.

Thus the Form 15CA is required to be filed online with the tax department. It is advisable to obtain 15CB.

even in cases where 15CA is not mandated. It is also in the interest of assesse to have a tax determination in Form 15CB from a CA, since non-resident taxation involves various complex issues and the consequences of non-deduction are severe.

If you are looking for more recent updates about these forms, its procedures or any compliance associated with it, our team of experts can assist you.

We can also assist you in setting up your business in India, accounting, bookkeeping, payroll, auditing, taxation, secretarial compliances, and trademark registration, business structuring and advisory services. If you require any assistance in this regard, kindly visit www.ajsh.in.

Author Bio

Qualification: CA in Practice
Company: AJSH & Co LLP (www.ajsh.in)
Location: Delhi, New Delhi, IN
Member Since: 17 May 2019 | Total Posts: 18
Ankit is a Bachelors in commerce from Delhi University and a fellow member of Institute of Chartered Accountants of India, New Delhi. He is also certified in IFRS and Forensic Accounting and Fraud Detection. He is the co-founder of the firm. Prior to being associated with AJSH, Ankit worked with th View Full Profile

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5 Comments

  1. ANOOP CHAUDHARY says:

    Generally banks ask for 15CA and 15CB almost all cases. I request your considered view whether submission of form 15CA and 15CB in case remittance is not taxable and covered under specified list of 33 is required? Whether transfer from own NRO to own NRE account is covered under list of 33 Nature of Payment/Purpose code S-1301 Remittances by non-residents towards family maintenance and savings as such submission of form 15 CA and 15 CB are not required.

  2. V Srinivas Rao says:

    The above article is elaborative and provide insight info on the forms. How to download information about all the Form 15CAs filed during a particular period from the Income tax site.

  3. Shareef K N says:

    Sir
    Your information is very useful
    Please upload income tax slab,standard deduction, tds rebeat onbank deposit ( intereste,) forthe current year,

  4. GANDHI MOHAN BHARATI says:

    If I desire to gift 1000 dollars to my son who has become a citizen of Canada am I required to submit these Forms to Banks?

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