A person making a remittance (a payment) to a Non Resident or a Foreign Company has to submit Form 15CA. This form is submitted online. In some cases, a certificate from a Chartered Accountant in Form 15CB is required before uploading Form 15CA online. In Form 15CB, a CA certifies details of the payment, TDS rate and TDS deduction as per section 195 of the Income Tax Act, if any DTAA (Double Tax Avoidance Agreement) is applicable, and other details of nature & purpose of the remittance.
Banks require these certificates before they make any remittance on your behalf to a non-resident.
i. Earlier, the person making a remittance to Non-Resident was required to furnish a certificate in specified format circulated by RBI.
ii. Basic purpose was to collect the taxes at a stage when the remittance is made as it may not be possible to collect the tax from the NR at a later stage.
iii. Thus to monitor and track the transactions in an efficient manner, it was proposed to introduce e-filling of information in the certificates.
iv. Section 195 of Income tax act, 1961 mandates the deduction of Income tax from payments made to Non Resident. The person making the remittance to non – resident needs to furnish an undertaking (in form 15CA) accompanied by a Chartered Accountants Certificate in Form 15CB.
As per Section 195 of Income tax Act, 1961, every person liable for making a payment to non-residents shall deduct TDS from the payments made to non-residents if such sum is chargeable to Income tax then the withholding tax need to be deducted and form 15CA and 15CB are the declaration for the same.
A person making the remittance (a payment) to a Non Resident or a Foreign Company has to submit the form 15CA. This form is submitted online. In some cases, a Certificate from Chartered Accountant in form 15CB is required after uploading the form 15CA online.
The furnishing of information for payment to non- resident , not being a company, or to a foreign company in Form 15CA has been classified into 4 parts –
PART A : Where the remittance or the aggregate of such remittance does not exceed 5 lakh rupees during the F.Y. (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 A.O. (Whether Nil rate or Lower rate Certificate).
PART C : Where the remittance or the aggregate of such remittance exceed 5 lakh rupees during the FY.
PART D : Where the remittance is not chargeable to tax under Domestic law.
15CB is the Tax Determination Certificate where the CA examines the remittance with regard to chargeability provisions under Section 5 and 9 of the Income Tax Act along with the provisions of Double Tax Avoidance Agreements.
In form 15CB, A CA certifies details of the payment, TDS rate and TDS deduction as per Section 195 of the Income Tax Act, if any DTAA is applicable, and other details of nature and purpose of the remittance.
Upload of Form 15CB is mandatory prior to filling Part C of Form 15CA. To prefill the details in Part C of form 15CA, the Acknowledgement Number of e- verified form 15CB should be verified.
Individual is not required to furnish the information in Form 15CA and 15CB for remittance which requires no RBI approval.
List of payments (28 items) mentioned in Rule 37BB which does not require compliances and reporting through the submission of 15CA and 15CB.
Name of the Remitter
Address of the Remitter
PAN of the Remitter
Principal Place of Business
E-mail Address and Phone No. of Remitter
Status of the Remitter (Firm/ Company/ Other)
Name and Status of the Remittee
Address of the Remittee
Principal Place of Business
Country of the Remittee
Country to which the Remittance is made
Currency
Amount of Remittance in Indian Currency
Proposed Date of Remittance
Nature of Remittance as per Agreement (Invoice Copy)
Name and Bank of Remitter
Name of Branch of the Bank
BSR Code of the Bank
Tax Residency Certificate (TRC) from the Remittee (Tax Registration of the Country in which remittee is registered).
Form 10F duly filled by the Authorized person of the remittee (Self Declaration).
No PE (Permanent Establishment) declaration. This is mandatory if the Income is a business Income.