The matter of whether Form 15CB is required for making payments to the Indian Bank account of a non-resident / foreign company is a grey area in the Income-tax law. Various entities have not been filing Form 15CA / 15CB while making payments to Indian Bank account of non-residents / foreign companies, since paying bank does not insist on the same while other entities are regularly filing Form 15CA / 15CB while making payment to a non-resident / foreign companies in their Indian bank accounts.
Section 2(29D) of the Income-tax Act, 1961 [“the Act”] defines the term ‘Non-resident’, “as a person who is not a ‘resident’ [and for the purposes of sections 92, 93 and 168, includes a person who is not ordinarily resident within the meaning of clause (6) of section 6”.
Section 195 of the Act deals with the provisions of tax deduction at source [“TDS”] of Non-residents. Section 195(6) of the Act provides as: “The person responsible for paying to a non-resident, not being a company, or to a foreign company, any sum, whether or not chargeable under the provisions of this Act, shall furnish the information relating to payment of such sum, in such form and manner, as may be prescribed”.
Rule 37BB of the Income-tax Rules, 1962 [“the Rules”] deals with the form and manner in which the information relating to any sum paid by the non-resident is required. Rule 37BB provides as under:
“The person responsible for paying to a non-resident, not being a company, or to a foreign company, any sum chargeable under the provisions of the Act, shall furnish the following, namely:
1. the information in Part A of Form No.15CA, if the amount of payment or the aggregate of such payments, as the case may be, made during the financial year does not exceed five lakh rupees;
(i) for payments other than the payments referred in clause (i), the information,—
(a) in Part B of Form No.15CA after obtaining,—
(b) a certificate from the Assessing Officer under section 197; or
(c) an order from the Assessing Officer under sub-section (2) or sub-section (3) of section 195;
(ii) in Part C of Form No.15CA after obtaining a certificate in Form No. 15CB from an accountant as defined in the Explanation below sub-section (2) of section 288.
The person responsible for paying to a non-resident, not being a company, or to a foreign company, any sum which is not chargeable under the provisions of the Act, shall furnish the information in Part D of Form No.15CA.”
|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|
|11||S0190||Imports below Rs.5,00,000 – (For use by ECD offices)|
|12||S0202||Payment for operating expenses of Indian shipping companies operating abroad|
|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.)|
|21||S0501||Construction of projects abroad by Indian companies including import of goods at project site|
|22||S0602||Freight insurance – relating to import and export of goods|
|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 and charitable 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.|
“The purpose of the undertaking and the certificate is to collect taxes at the stage when the remittance is made as it may not be possible to recover the tax at a later stage from the non-residents. There has been a substantial increase in foreign remittances, making the manual handling and tracking of certificates difficult. To monitor and track transactions in a timely manner, it is proposed to introduce the e-filing of the information in the certificate and undertaking. The amendment, therefore, proposes to provide that the person responsible for deduction of Income-tax shall furnish the information relating to the payment of any sum to the non-resident or to a foreign company in a form and manner to be prescribed by the Board.”
Though a possible view of non-filing of Form 15CA / 15CB exists, in case of remittance is to be made to an Indian bank account of the non-resident, it is advisable to file Form 15CA / 15CB even in cases where remittances are to be made to Indian bank accounts of the non-resident.
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