21 Apr 2020

15CA CB

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15CA CB

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.

 

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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 15 CB 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.

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).

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).

List of payments where Form 15CA CB is not required:

Sr 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 S0101  Advance payment against imports
8 S0102  Payment towards imports – settlement of invoice
9 S0103  Imports by diplomatic missions
10 S0104  Intermediary trade
11 S0190  Imports below Rs.5,00,000 – (For use by ECD offices)
12 SO202  Payment for operating expenses of Indian shipping companies operating abroad
13 SO208  Operating expenses of Indian Airlines companies operating abroad
14 S0212  Booking of passages abroad – Airlines companies
15 S0301  Remittance towards business travel
16 S0302  Travel under basic travel quota (BTQ)
17 S0303  Travel for pilgrimage
18 S0304  Travel for medical treatment
19 S0305  Travel for education (including fees, hostel expenses etc.)
20 S0401  Postal services
21 S0501  Construction of projects abroad by Indian companies including import of goods at project site
22 S0602  Freight insurance – relating to import and export of goods
23 S1011  Payments for maintenance of offices abroad
24 S1201  Maintenance of Indian embassies abroad
25 S1202  Remittances by foreign embassies in India
26 S1301  Remittance by non-residents towards family maintenance and savings
27 S1302  Remittance towards personal gifts and donations
28 S1303  Remittance towards donations to religious and charitable institutions abroad
29 S1304  Remittance towards grants and donations to other Governments and charitable institutions established by the Governments
30 S1305  Contributions or donations by the Government to international institutions
31 S1306  Remittance towards payment or refund of taxes
32 S1501  Refunds or rebates or reduction in invoice value on account of exports
33 S1503  Payments by residents for international bidding.

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