Form 15CA is submitted online if there is a foreign remittance to non residents and Form 15CB is a certificate issued by a CA after examining the remittance having regard to provisions of Double tax Avoidance Agreements with the Recipient’s Residence Country.

CBDT has made some changes in Rule 37BB to reduce the compliance burden under Section 195 of the Income-tax Act regarding compliance and furnishing of information of Foreign remittance whether taxable or not. The changes are applicable from today itself i.e. 1st April 2016.

 

Sec 195(6) states that 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.

 

No 15CA / CB are required in following cases:-

 

• If an individual is making remittance which do not requiring RBI approval under its Liberalized Remittance Scheme (LRS) or items mentioned in Schedule III to the Foreign Exchange (Current Account Transaction) Rules, 2000

                         or

• If remittance is in the nature of 33 items provided in the rule 37BB. The main items are as follows:-            

                       –   Indian investment in Equities or Debt securities abroad

                       –   Investment in Real estate abroad

                       –   Advance or Payment for Imports including Freight & Insurance

                       –   Remittance towards business travel

                       –   Travel for Medical Treatment

                       –   Payment for Education or Postal Services

                       –   Personal Gifts and donations

 

The format of undertaking in Form 15CA which is to be filed electronically and the format of certificate from an Accountant in Form 15CB have been notified in Rule37BB of Income Tax Rules 1962.

 

The CBDT has amended Rule 37 BB of the Income-tax Rules and made following changes which are applicable from today itself i.e. 1st April 2016.

 

Rule 37BB has been amended and provides that:

 

The furnishing of information for payment to a non-resident, not being a company, or to a foreign company in Form 15CA has been classified into 4 parts- Part A, Part B, Part C and Part D, wherein:

 

Part A

Where the remittance or the aggregate of such remittances does not exceed Rs. 5 lakh during the FY.  (Whether taxable or not)

 

Part B

Where an order/ certificate u/s 195(2) / 195(3) / 197 of Income-tax Act has been obtained from the AO. (Whether NIL rate or Lower Rate Certificate)

 

Part C

Where remittance is chargeable to tax under domestic law and the remittance or the aggregate of such remittances exceeds 5 lakh rupees during the FY and a certificate in Form No. 15CB from a CA has been obtained electronically. (Utility available on Income Tax Efiling Website)

 

Part D

Where the remittance is not chargeable to tax under Domestic Law.

 

For easy understanding, Foreign payments are now easy with changes in Form 15CA/CB:

 

Part A shall be filed if following conditions are fulfilled:

• Payment made to Non- Residents
• Nature of payment does not fall under Specified Lists
• Payment is taxable in India
• Total payment made to recipient during the FY does not exceeds Rs. 5lakhs

 

Part B shall be filed if following conditions are fulfilled:

• Payment made to Non- Residents
• Nature of payment does not fall under Specified Lists
• Payment is taxable in India
• Total payment made to recipient during the FY exceeds Rs. 5lakhs
• Any order u/s 197 or 195(2) has been obtained

 

Part C shall be filed if following conditions are fulfilled + 15CB:

• Payment made to Non- Residents
• Nature of payment does not fall under Specified Lists
• Payment is taxable in India
• Total payment made to recipient during the FY exceeds Rs. 5lakhs
• Any order u/s 197 or 195(2) has not been obtained

 

Note: Form 15CB is required only if Part C of Form 15CA is applicable

 

Part D shall be filed if following conditions are fulfilled:

• Payment made to Non- Residents
• Nature of payment does not fall under Specified Lists
• Payment is not taxable in India

For any assistance visit taxmantra.com.

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