CHECK LIST FOR MAKING FORM 15CA AND 15CB BY PROFESSIONALS

By C.A Pratik Anand, ACA

Nowadays Form 15CA and 15CB are of a lot importance. We professional atleast have to issue one Form 15CB every day and form 15CA is also to be made by the professional on behalf of the client.

Form 15CA is a Declaration of Remitter and is 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. In the modern times, the system for selection of cases into scrutiny have reduced drastically and without scrutiny there was no check to ensure that taxable foreign remittances have been made after deduction of tax or not. Therefore, the remittance channel i.e. Banks have been directed to obtain Form 15CA and 15CB before making any remittance. Authorised Dealers/ Banks are now becoming more vigilant in ensuring that such Forms are received by them before remittance is effected since now as per revised Rule 37BB a duty is casted on them to furnish Form 15CA received from remitter, to an income-tax authority for the purposes of any proceedings under the Income-tax Act and also the revised FEMA Guidelines issued in July'2014 cast duty on the banks to ascertain the Tax Liability in each case of remittance. As per the revised RBI Guidelines, The RBI in this regard will not issue any guidelines with respect to deduction of tax at source on foreign remittances. Therefore the Banks are urging the remitters to provide such Form 15CA and 15CB even in case of Import purchases.

Here is an attempt to make a comprehensive check list/procedure for effecive furnishing of Form 15CA and 15CB.

REQUIREMENTS FOR MAKING FORM 15CA and 15CB

Step 1:  Ascertain whether Form 15CA and CB are actually required to be made.

As per Income Tax (Fourteenth Amendment) Rules, 2013, No reporting in Form 15CA and 15CB is to be made in case of the following nature of foreign remittances w.e.f 01.10.2013

	SPECIFIED LIST
Sl.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	S0202	Payment- for operating expenses of Indian shipping companies operating abroad.
8	S0208	Operating expenses of Indian Airlines companies operating abroad
9	S0212	Booking of passages abroad -Airlines companies
10	S0301	Remittance towards business travel.
11	S0302	Travel under basic travel quota (BTQ)
12	S0303	Travel for pilgrimage
13	S0304	Travel for medical treatment
14	S0305	Travel for education (including fees, hostel expenses etc.)
15	S0401	Postal services
16	S0501	Construction of projects abroad by Indian companies including import of goods at project site
17	S0602	Freight insurance - relating to import and export of goods
18	S1011	Payments for maintenance of offices abroad
19	S1201	Maintenance of Indian embassies abroad
20	S1 202	Remittances by foreign embassies in India
21	S1301	Remittance by non-residents towards family maintenance and-savings
22	S1302	Remittance towards personal gifts and donations
23	S1303	Remittance towards donations to religious and charitable institutions abroad
24	S1304	Remittance towards grants and donations to other Governments and charitable institutions established by the Governments.
25	S1305	Contributions or donations by the Government to international institutions
26	S1306	Remittance towards payment or refund of taxes.
27	S1501	Refunds or rebates or reduction in invoice value on account of exports
28	S1503	Payments by residents for international bidding".

Therefore no Form 15CA and 15CB are required in the abovementioned 28 nature of foreign remittances.

Step 2:  Once it is ascertained that Form 15CA and 15CB have to be made then one should ascertain the part of Form 15CA to be filled by the assessee, by reading the following extracts of Amended Rule 37BB;

Rule 37BB. (1) Any person responsible for paying to a non-resident, not being a company, or to a foreign company, any interest or salary or any other sum chargeable to tax under the provisions of the Act, shall furnish the following, namely:

(i)                  the information in Part A of Form No.15CA, if the amount of payment does not exceed fifty thousand rupees and the aggregate of such payments made during the financial year does not exceed two lakh fifty thousand rupees;

(ii)                the information in Part B of Form No.15CA for payments other than the payments referred in clause (i)

Step 3:  Information to be required from the client

A	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)
B	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
C	DETAILS OF THE 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)
D	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
E	OTHERS
1	FATHER'S NAME OF THE SIGNING PERSON
2	DESIGNATION OF THE SIGNING PERSON

F   a)  FORM 10F DULY FILLED BY THE AUTHORISED PERSON OF THE REMITTEE.

b) TAX RESIDENCY CERTIFICATE FROM THE REMITTEE (TAX REGISTRATION OF THE COUNTRY IN WHICH REMITTEE IS REGISTERED

c) CERTIFICATE THAT THE REMITTEE DOES NOT HAVE ANY PERMANENT ESTABLISHMENT IN INDIA. THIS IS MANDATORY IF THE INCOME IS A BUSINESS INCOME AND NOT CHARGABLE TO TAX AS PER DTAA IF THERE IS NO P.E IN INDIA.

THIS IS REQUIRED IF ANY BENEFIT UNDER DTAA IS TAKEN, WHETHER BY WAY OF LOWER RATE OF DEDUCTION OF TAX AT SOURCE OR NO DEDUCTION OF TAX AT SOURCE AS PER DTAA.

Hope you find the above information relevant and useful in your daily practise.

The author is a CA in practice at Delhi and can be contacted at:

E-mail: capratikanand@gmail.com

Mobile: +91-9953199493

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Applicability of Form 15CA and 15CB w.e.f 01/10/2013

CBDT has again changed the Rule 37BB of Income Tax Rule and the new rule will help the Indian Parties remitting/paying the monies to foreign persons/companies. Now it has been provided  that in case of 28 types of payments , there shall be no need to submit Form 15CA or obtaining Form 15CB.

Changes in New Form 15CA

Part A of Form 15 CA (Form 15CB not required)
Particulars	Changes
Who Shall Fill It	To be filled up if the remittance to non resident or to a foreign company do not exceed Rs. 50000 per transaction and aggregate of such payments made during the financial year does not exceed Rs. 2,50,000
What information has to be filled	1. Particulars of Remitter, Remittee, Remittance made and TDS
	2. Mandatory to furnish PAN of Remitter, if tax is deducted
	3. Form prescribes mandatory application of provisions of Section 206AA, if remittance is chargeable to tax and PAN of remittee is not available.
	4. E-mail and Phone Number of remittee to be furnished, if available

Part B of Form 15 CA (Form 15CB not required)
Who Shall Fill It	To be filled up if the remittance is covered by specified list (given in Explanation to Rule 37BB) and the amount paid to the non-resident or foreign company is claimed not chargeable to tax.
What information has to be filled	1. Details of Remitter, Remittee and Remittance.
	2. In addition, nature of remittance, relevant code of specified list (given in Explanation to Rule 37BB) under which remittance is covered and information to be provided regarding the country of residence of the remittee, if available.
	3. Form 15CB is not required to be furnished if remittance is covered in this part.

Part C of Form 15 CA ***(Form 15CB required)
Who Shall Fill It	To be filled up for remittances other those specified in Part A and Part B
What information has to be filled	1. Forms prescribe mandatory application of provisions of Section 206AA, if PAN of remittee is not available;
	2. Other Details
	Secion A:
	Details of Remitter, Remittee and Accountant to be specified in this section
	Secion B:
	Particulars of remittance and TDS (as per certificate of accountant), namely:
	a. Taxability under the Income Tax Act
	b. Taxability under the relevant DTAA
	c. Details of TRC (Tax Residency Certificate)
	d. Bifurcation of capital gains, if any, into short-term, long-term capital gains and the basis of arriving at taxable income

*** Part C of Form 15CA is to be filled after obtaining either of the below

§  a certificate in form no. 15cb from an accountant (chartered accountant) or

§  a certificate from the Assessing Officer (AO) under Sec 197 or

§  an order from AO under sub-sec (2) or sub-section (3) of sec 195

Changes in New Form 15CB

Additional details to be provided in new Form 15CB are

§  Taxability under the Income-tax Act without considering the relief of the DTAA

§  If income is chargeable to tax in India and relief is claimed under the DTAA, whether TRC has been obtained from the recipient?

§  If remittance is on account of capital gains details of amount of short-term, long-term capital gains and the basis of arriving at the taxable income.

What are the List of Payments Exempt from Filing of Form 15CA?

The Rule 37BB also contains a Specified List on which Rule 37BB(1) does not apply. This is cleared in the Rule itself by adding an explanation 2 as under
Explanation 2.—For the removal of doubts, it is hereby clarified that for payments of the nature specified in column (3) of the specified list below, no information is required to be furnished under sub-rule (1).

Here is the list of 28 Types of Payments

SPECIFIED LIST:

Sl. No. (1)	Purpose code as per RBI (2)	Nature of payment (3)
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	S0202	Payment for operating expenses of Indian shipping companies operating abroad.
8	S0208	Operating expenses of Indian Airlines companies operating abroad
9	S0212	Booking of passages abroad – Airlines companies
10	S0301	Remittance towards business travel.
11	S0302	Travel under basic travel quota (BTQ)
12	S0303	Travel for pilgrimage
13	S0304	Travel for medical treatment
14	S0305	Travel for education (including fees, hostel expenses etc.)
15	S0401	Postal services
16	S0501	Construction of projects abroad by Indian companies including import of goods at project site
17	S0602	Freight insurance – relating to import and export of goods
18	S1011	Payments for maintenance of offices abroad
19	S1201	Maintenance of Indian embassies abroad
20	S1202	Remittances by foreign embassies in India
21	S1301	Remittance by non-residents towards family maintenance and savings
22	S1302	Remittance towards personal gifts and donations
23	S1303	Remittance towards donations to religious and charitable institutions abroad
24	S1304	Remittance towards grants and donations to other governments and charitable institutions established by the governments.
25	S1305	Contributions or donations by the Government to international institutions
26	S1306	Remittance towards payment or refund of taxes.
27	S1501	Refunds or rebates or reduction in invoice value on account of exports
28	S1503	Payments by residents for international bidding”.

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