15CA and 15CB on taxable foreign remittance charges

The Government of India / Ministry of Finance / Revenue Department / Central Board of Direct Taxes recently published a press release on the major changes and amendments to 15CA and 15CB relating to taxable foreign remittances, Changes Form 15CA and Form 15CB with respect to information provided on payments made to non- resident Indians in accordance with section 195 of the Law.

CBDT has made a number of changes to Rule 37BB to reduce the burden of compliance under Section 195 of the Income Tax Act with respect to compliance and the provision of foreign remittance information, whether taxable or not . The major modifications to the amended Rules are:

• An individual is not required to submit information for remittance in Forms 15CA and 15CB that does not require RBI approval.
• The list of payments specified in Rule 37 BB that does not require Forms 15CA and 15CB to be submitted has been extended from 28 to 33, including import payments.
• A CA certificate in Form No. 15CB shall not be issued if payments to non- residents are not taxable and the payment amount during the year does not exceed Rs. 5 lakh.
• The information in 15CA and 15CB is only required in the case of taxable foreign remission.
• Such amendments shall enter into force on 01.04.2016.

Details about 15CA and 15CB on Taxable Foreign Remittance Changes

The provisions applicable to Income- Tax Rule 37BB read with Sec 195 shall be amended on 1 Apr 2016, i.e. Form 15CB & CA issuance. The following are the key points.

The provision of payment information to a non- resident, non- company or a foreign company in Form 15CA was classified in 4 parts- Part A, Part B, Part C and Part D, where:

• FORM A: If the remittance amount or aggregate of the remittance made during the financial year does not exceed INR 500,000( Note 1)–( whether or not taxable)
• FROM B: If the remittance or aggregate amount of remittance made during the financial year does not exceed INR 500,000, the Income Tax Officer has obtained an exemption order / certificate–( whether NIL rate or lower rate certificate)
• FORM C: If the remittance amount or aggregate of such remittance exceeds INR 500,000 during the financial year, a certificate in Form 15CB shall be obtained by the accountant.
• FORM D: In the remittance is not chargeable to tax (Note 2)

NOTE 1: The earlier threshold was higher than 50,000 per payment or overall transfers exceeded INR 250,000 in the financial year.

NOTE 2: No information is required if the remittance is not taxable if:

1. The remittance shall be made by an individual and shall not require the prior approval of RBI in accordance with FEMA provisions, and
2. The remittance shall be of the nature referred to in the “SPECIFIED LIST”– on page 2 & 3 of the annex.

In addition, the list of payments of a specified nature referred to in Rule 37 BB that do not require Forms 15CA and 15CB to be submitted has been extended from 28 to 33. The IT Dept has completely revised the Form 15CB & CA process and now IT Dept expects the certifying CA to certify Form 15CB online, similar to an audit report.

The form 15CB & CA process explained in brief:

FORM 15CB

• The Remitter / Company must add CA to the eFiling Portal, whoever signs the 15CB 2 form.
• The xml file ‘ Form 15CB’ must be generated using a’ Utility,’ manual / paper signature is discontinued 3.
• So added CA uses its own eFiling Login to upload the Form 15CB xml file
• The customer must approve the same 5. Once approved, the Remitter will be allocated with ‘ Recognition Number,’ which must be kept in when requested, while filing’ Form 15CA’

FORM 15CA

• The remitter / company must log in to the eFiling portal of the company.
• The Remitter / Company must create a’ Signature xml file’ using the’ DSC Management Utility’ to upload it while filing Form 15CA.
• Choose’ Prepare and submit online forms (other than ITR)’ under the tab’ eFile’ and select 15CA.
• Follow the on- screen instructions and steps to file the Form 15CA online.

WHAT IS FORM 15CA?

Form 15CA is a tool for collecting information on payments that are taxable in the hands of the non- resident recipient. Form 15CA is a Remitter Declaration

WHAT IS FORM 15CB?

The 15CB certificate is an alternative channel for obtaining tax clearance apart from the Assessing Officer certificate. 15CA 15CB is certificate for abroad payment.

DOCUMENTS REQUIRED BY THE CHARTERED ACCOUNTANT TO OBTAIN 15CA AND 15CB

1. PAN Card of Applicant (Remitter)
2. Invoice for which payment is to be made.
3. No PE Declaration from Non Resident ( if applicable)
4. Bank Account Details (Cancelled Cheque) from which payment is to be made
5. BSR Code (Branch code of bank from which payment is to be made.
6. Digital Signature of Remitter.

Required information from the customer:-

DETAILS OF REMITTER

1. Name of the Remitter
2. Address of the Remitter
3. PAN of the Remitter
4. Principal Place of Business of the Remitter
5. E-Mail Address and Phone No. Of Remitter
6. Status of the Remitter (Firm/Company/Other)

DETAILS OF REMITTEE

1. Name and Status of the Remittee
2. Address of the Remittee
3. Country of the Remittee (Country to Which Remittance Is Made)
4. Principal Place of the Business of the Remittee

DETAILS OF REMITTANCE

1. Country to Which Remittance Is Made
2. Currency in Which Remittance Is Made
3. Amount of Remittance in Indian Currency
4. Proposed Date of Remittance
5. Nature of Remittance as Per Agreement (Invoice Copy to Be Asked From Client)

BANK DETAILS OF THE REMITTER:-

1. Name of Bank of the Remitter
2. Name of Branch of the Bank
3. BSR Code of the Bank