Filing of Form 15CA and 15CB- An overview

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    Form 15CA and 15CB

In order to transfer a payment to a foreign company or outside India, it is necessary to abide by various rules and regulations.

 

According to Section 195 of the Income-tax Act, 1961, any person who pays money to a non-resident, including foreign companies is required to deduct income tax. Further, one of the requirements for making payment outside India is filling of form 15CA and 15CB.

 

What are Form 15CA and 15CB?

 

The main objective of filing the form 15CA and 15CB is to collect taxes as soon as the remittance is made, because it becomes more difficult to collect taxes from non-residents later.

 

For that reason, forms 15CA and 15CB were electronically filed in order to monitor and check the effectiveness of such transactions.

 

Form 15CA:

 

Form 15CA states that a person remitting money to a non-resident has deducted the tax from those payments.

 

Form 15CB:

 

Form 15CB is issued by a Chartered Accountant to ensure that the tax deduction rules have been followed during the payment process.

 

●      Information about the payment made to a non-resident.

●      Income tax compliance with Section 195.

●      Tax properly Deducted

●      Whether Double taxation avoidance agreements apply.

 

 

When is Form 15CA not applicable?

 

●       Rules 37BB of the Income Tax Rules require the remitter to remit based on the list of payments.

●       Section 5 of the Foreign Exchange Management Act, 1999 does not apply to individuals who do not need RBI approval.

 

When is Form 15CB not applicable?             

 

●   For remittances which are not taxable.

●   Income in a recipient's country of residence may be taxable

●   If the total remittances during the year does not exceed Rs. 5,00,000, then Form 15CA and 15CB are not required.

 

 

Form 15CA Components

 

●      Part A – If the remittance exceeds the threshold amount of 5 lakh rupees in the F.Y. and is chargeable to tax under the Income Tax Act.

●      Part B - Form 15CA - Section B is used where payment amounts exceed Rs. 5 lakhs. The filer enters information in Section B after obtaining a certificate from the Assessing Officer (valid under section 197) or an order from the Assessing Officer (valid under sub-section (2) or sub-section (3) of section 195).

●      Part C – A Form 15CB from a Chartered Accountant is required if the remittance is tax deductible under the Income Tax Act and does not exceed 5 lakh rupees during the financial year.

●      Part D – Is filled whenever remittances are not taxable under domestic laws.

 

 

Guidelines of filing form 15CA?

 

You can access the form 15CA online on the government’s official income tax e-filing portal. This will be electronically submitted to concerned authorities.

 

Step-wise guidance to file Form 15CA is as under:

 

●      Step 1- Access the official portal for E-filing at https://incometaxindiaefiling.gov.in/ and log in using your valid credentials.

●      Step 2- Select "E-file" from the top menu and then click on Income Tax Forms.

●      Step 3- Once the taxpayer’s PAN information is filled, select “Form 15CA” from the drop-down menu titled “Form Name”

●      Step 4- Select your appropriate section by clicking on “Select relevant part from the down”

●      Step 5- Fill out the selected fields on Form 15CA and click "Submit".

●      Step 6- Complete the verification section in the corresponding part of Form 15CA.

 

It is recommended that you fill Part C of Form 15CA before uploading Form 15CB, since the acknowledgement number of Form 15CB is required while filing Part C.

 

As soon as the form is successfully filled out, you will see a notification "successfully submitted" including a confirmation message on the registered email.

 

 

CA can follow the below-mentioned steps to fill out Form 15CB

 

1.     Click on the Downloads tab at https://www.incometax.gov.in/iec/foportal.

2.     Choose the appropriate forms, (other than ITR) and then convert them in JSON Utility (whichever is most appropriate).

3.     Using your preferred utility, create the XML file.

4.     When you are logged into the e-filing portal, click the e-File tab and choose Upload Form from the drop-down menu.

5.     Input the PAN/TAN details of the assessee and the CA PAN, and then select Form Named Filing Type as the original. Press 'submit'.

 

Above was an overview of filing of form 15CA and 15CB and every person should keep in mind the above, while making remittance of money outside India.