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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CBDT amends I-T Rules for furnishing of info of sum paid to NRs; revised Forms 15CA and 15CB notified

INCOME-TAX (TWELFTH AMENDMENT) RULES, 2013 - SUBSTITUTION OF RULE 37BB AND FORM NOS. 15CA AND 15CB

NOTIFICATION NO. 58/2013 [F.NO.149/119/2012-SO(TPL)]/SO 2363(E), DATED 5-8-2013

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. (1) These rules may be called the Income-tax (12th Amendment) Rules, 2013.

(2) They shall come into force on the 1st day of October, 2013.

2. In the Income-tax Rules, 1962 (hereafter referred to as the said rules), for rule 37BB, the following rule shall be substituted, namely:—

"37BB. Furnishing of information by the person responsible for making payment to a non-resident, not being a company, or to a foreign company—(1) The person responsible for making any payment to a non-resident, not being a company, or to a foreign company 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 , if the payment is not chargeable to tax and is of the nature specified in column (3) of the specified list ;
(iii)		the information in Part C of Form No.15CA for payments other than the payments referred in clause (i) and clause (ii) after obtaining—

(a)		a certificate in Form No. 15CB from an accountant as defined in the Explanation below sub-section (2) of section 288; or
(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.

(2) The information in Form No. 15CA shall be furnished by the person electronically to the website designated by the Income-tax Department and thereafter signed printout of the said form shall be submitted to the authorised dealer, prior to remitting the payment.

(3) An income-tax authority may require the authorised dealer to furnish the signed printout referred to in sub-rule (2) for the purposes of any proceedings under the Act.

(4) The Director General of Income-tax (Systems) shall specify the procedures, formats and standards for ensuring secure capture, transmission of data and shall also be responsible for the day-to-day administration in relation to furnishing the information in the manner specified.

Explanation. - For the purposes of this rule,—

(a)		'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);
(b)		the specified list refers to the payments of the nature as indicated below:

SPECIFIED LIST

	Sl.No.	Purpose code as per RBI	Nature of payment
	(1)	(2)	(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	S0101	Advance payment against imports
	8	S0102	Payment towards imports-settlement of invoice
	9	S0103	Imports by diplomatic missions
	10	S0201	Payments for surplus freight or passenger fare by foreign shipping companies operating in India.
	11	S0202	Payment for operating expenses of Indian shipping companies operating abroad.
	12	S0203	Freight on imports - Shipping companies
	13	S0204	Freight on exports - Shipping companies
	14	S0206	Booking of passages abroad - Shipping companies
	15	S0208	Operating expenses of Indian Airlines companies operating abroad
	16	S0209	Freight on imports - Airlines companies
	17	S0212	Booking of passages abroad - Airlines companies
	18	S0213	Payments on account of stevedoring, demurrage, port handling charges etc.
	19	S0301	Remittance towards business travel.
	20	S0302	Travel under basic travel quota (BTQ)
	21	S0303	Travel for pilgrimage
	22	S0304	Travel for medical treatment
	23	S0305	Travel for education (including fees, hostel expenses etc.)
	24	S0401	Postal services
	25	S0501	Construction of projects abroad by Indian companies including import of goods at project site
	26	S0601	Payments for life insurance premium
	27	S0602	Freight insurance - relating to import and export of goods
	28	S0603	Other general insurance premium
	29	S1011	Payments for maintenance of offices abroad
	30	S1201	Maintenance of Indian embassies abroad
	31	S1202	Remittances by foreign embassies in India
	32	S1301	Remittance by non-residents towards family maintenance and savings
	33	S1302	Remittance towards personal gifts and donations
	34	S1303	Remittance towards donations to religious and charitable institutions abroad
	35	S1304	Remittance towards grants and donations to other governments and charitable institutions established by the governments.
	36	S1305	Contributions or donations by the Government to international institutions
	37	S1306	Remittance towards payment or refund of taxes.
	38	S1501	Refunds or rebates or reduction in invoice value on account of exports
	39	S1503	Payments by residents for international bidding".

3. In the said rules, in Appendix II, for Form No.15CA and Form No. 15CB, the following Forms shall be substituted, namely:-

FORM NO. 15CA (See rule 37BB) Information to be furnished for payments to a non-resident not being a company, or to a foreign company

Form No. 15CB (See rule 37BB) Certificate of an accountant 1

---

1. To be signed and verified by an accountant (other than an employee) as defined in the Explanation below sub-section (2) of section 288 of Income-tax Act, 1961.

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