23 Apr 2020

15CA CB For NRE NRO

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15CA CB for NRE NRO

What is Form 15CA CB?

International transactions come with many tax implications. So one oftens misses out on these.

Section 195 of the Income Tax Act requires us to deduct tax for amounts which are taxable under the Act. So for international transactions, the banks mantains these records. Further, when we make any payment to a non resident, the bank checks whether we’ve paid tax or not. So for this aspect, they rely on certificates from Chartered Accountants. We submit Form 15CA and CB to banks with this information. Generally CAs prepare and certify Form 15 CB. In some cases, 15CA CB may be required while paying rents. We cover whether we require forms 15 CA CB for NRE NRO account transfers?

 

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What is Form 15CA?

Form 15CA is a declaration of the remitter. And a tool used for collecting information in respect of payments made to non-residents. The form indeed contains the details of the remittance. As well as the tax information of the transaction. Specifically, whether the payment is liable to tax or not.
 
Authorised Dealers and Banks now ensure that we pay taxes for transactions initiated through them. Therefore they ask us to submit these forms before processing the transaction. They collect these forms and further share them with the tax authorities.
 
This specifically is part of a Information Processing System used by the Income tax Department. Since it tracks the foreign remittances and their nature to determine tax liability. In fact income Tax Department has also created an online facility to file such information. Thus we file Form 15CA online with the IT department. Though after online submission, we still print and share the details with the bank/AD.

What is From 15CB?

Form 15 CB is a certificate and required to be signed by a Chartered Accountant. The certificate states the rates and taxes paid in detail. Or in some cases, reasons because of which taxes arent paid. Both the forms are almost have the same content. However, 15CB requires certification. Also, We file Form 15CB first as 15CA requires its acknowledgement number.

Form 15CA CB Applicability

Whether each and every foreign transaction requires furnishing Form 15CA & 15CB?

In fact as per the Revised Income Tax Rules, now we need Form No. 15CB only for payments which are both taxable and amount exceeds Rs 5 lakhs. 

For the following types of transactions form 15CB are not required:

  • A transaction by an individual which does not require RBI approval.
  • Payments of specified nature mentioned in Rule 37BB (shared in brief below).

However, even when not required, we’ve heard of cases where banks still ask for a 15CA CB. As per Income Tax Rules, No reporting in Form 15CA and 15CB is to be made in case of the following nature of foreign remittances (provided in Rule 37BB). See full list here.

What are NRO and NRE Accounts?

  1. An NRI uses an account called NRO account for making transactions within India. Generally for depositing Indian incomes like dividends and rent. Or incomes through any investment or sale of property. In case of an NRO account, both a non-resident and a resident may become joint holders. NRO stands for Non Resident Ordinary Account.
  2. An NRE account is mainly for depositing income from abroad. Or transferring funds from abroad to India. In case of NRE accounts, only NRIs can become joint account holders. NRE stands for Non Resident External Account.

An NRI can transfer funds from NRE to NRO account. Also, an NRI can transfer funds from NRO to NRE account only if the amount is within USD 1 million in a financial year. So this amount/limit is the maximum.

Form 15CA CB for NRE NRO Account transfers

Generally Banks will ask for 15CA CB for NRE NRO account transfers. That is, transfer from NRO account to NRE account. And not for the other way around. Also, note that for such transfers,

  • Form 15CA CB should be provided before making the remittance.
  • Both the remitter and remittee will be the same person.
  • And the Rupee is the Currency.

Although note that there is an excemption (code S-1301). S-1301 is remittance by non-residents towards family maintenance and savings. If your remittance falls under this, then 15CA CB isn’t required.

Difference Parts of Form 15CA

We classify form 15CA 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 unde

Mandatory information required while filing a Form 15CA and 15CB

  1. 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)
  2. 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
  3. 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)
  4. 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
  5. Others
    1. Father’s name of the signing person
    2. Designation of the signing person
  6. Documents from the Remittee
    1. Form 10F duly filled by the authorized person of the remittee.
    2. Tax residency certificate from the remittee (tax registration of the country in which remittee is registered).

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