All About Form 15CA & CB

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1. Why Form 15CA?
Form 15CA is a Declaration of Remitter and
is used as a tool for collecting information in respect of payments which are
chargeable to tax in the hands of recipient non-resident. This
is starting of an effective Information Processing System which may be utilized
by the Income tax Department to independently track the foreign
remittances and their nature to determine tax liability. Authorised Dealers/ Banks are now becoming more vigilant in
ensuring that such Forms are received by them before remittance is effected
since now as per revised Rule 37BB a duty is casted on them to furnish Form
15CA received from remitter, to an income-tax authority for the purposes of any
proceedings under the Income-tax Act.


2. Whether Form 15CA has to be
submitted in all cases since the Bankers demand it invariably?
In this regards the attention is invited to the
Headings of the Form which provides as under:
“Information to be furnished
for payments, chargeable to tax, to a non-resident not being a
company, or to a foreign company”
“(To be filled up if the
remittance is chargeable to tax
 and does not exceed fifty thousand
rupees and the aggregate of such remittances made during the financial year
does not exceed two lakh fifty thousand rupees)”
(Underlined for emphasis)
As can be seen from above the Form clearly states that
it needs to be filled only if the remittance is chargeable
to tax in India.
 Therefore on the first blush it appears crystal clear that Form
15CA is not required to be filled if the remittance/ payment to non-resident
are not chargeable to tax.
 However the confusion has been created to Banks since a list As per Income Tax (Fourteenth
Amendment) Rules, 2013, No reporting in Form 15CA and 15CB is to be made in
case of the following nature of foreign remittances w.e.f 01.10.2013 has been
provided in Rule 37BB.
SPECIFIED LIST  
Sl. No.
Purpose code as per RBI
Nature of Payment (3)
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
S0202
Payment-
for operating expenses of Indian shipping companies operating abroad.
8
S0208
Operating
expenses of Indian Airlines companies operating abroad
9
S0212
Booking of
passages abroad -Airlines companies
10
S0301
Remittance
towards business travel.
11
S0302
Travel
under basic travel quota (BTQ)
12
S0303
Travel for
pilgrimage
13
S0304
Travel for
medical treatment
14
S0305
Travel for
education (including fees, hostel expenses etc.)
15
S0401
Postal
services
16
S0501
Construction of projects abroad by Indian
companies including
import of goods at project site
17
S0602
Freight
insurance – relating to import and export of goods
18
S1011
Payments
for maintenance of offices abroad
19
S1201
Maintenance
of Indian embassies abroad
20
S1 202
Remittances
by foreign embassies in India
21
S1301
Remittance
by non-residents towards family maintenance and-savings
22
S1302
Remittance
towards personal gifts and donations
23
S1303
Remittance
towards donations to religious and charitable institutions abroad
24
S1304
Remittance
towards grants and donations to other Governmentsand charitable
institutions established by the Governments.
25
S1305
Contributions
or donations by the Government to international institutions
26
S1306
Remittance
towards payment or refund of taxes.
27
S1501
Refunds or
rebates or reduction in invoice value on account of exports
28
S1503
Payments
by residents for international bidding”.
Therefore no Form 15CA and 15CB are required in the
abovementioned 28 nature of foreign remittances.
3. What stand customer can take if
Bank demand Form 15CA but service is not taxable?
In such cases, the possible recourse is to submit a
declaration in form of a note to Bank stating the nature of remittance and
reason as to why it is not chargeable to tax and consequently exempted from the
submission of Form 15CA.
4. Why Form 15CB?
The answer is Form 15CB. Chargeability can be ascertained
and certified by obtaining the Certificate from a Chartered Accountant in Form
no. 15CB. This certificate has been prescribed under Section 195(6) of
the Income tax Act and is an alternate channel of obtaining Tax
clearance apart from Certificate from Assessing Officer.
Perusal of Form 15CB makes it clear
that there is no condition or exemption to obtain such certificate when the
remittance is not chargeable to tax.
 In fact this Form 15CB is the Tax Determination
Certificate where the Issuer CA examines the remittance having regard to
chargeability provisions under Section 5 and 9 of Income tax Act along with
provisions of Double tax Avoidance Agreements with the Recipient’s Residence Country.
Therefore in my opinion, it is advisable to obtain 15CB even in cases where
15CA is not mandated. Though there is no penal provision prescribed in the Act
if such Certificates in Form 15CB and Declaration in Form 15CA are not
obtained, but it is in the interest of Assessee to have a tax
determination in Form 15CB from a CA, since Non-resident taxation involves
various complex issues and the consequences of Non deduction are severe.
5. Once it is ascertained that Form
15CA and 15CB have to be made then one should ascertain the part of Form 15CA
to be filled by the assessee, by reading the following extracts of Amended Rule
37BB;  
Rule 37BB. (1) Any person responsible for paying to a
non-resident, not being a company, or to a foreign company, any interest or
salary or any other sum chargeable to tax under the provisions of the Act, shall
furnish the following, namely:
(i) the information in Part A of Form No.15CA, if the
amount of payment
does not exceed fifty thousand rupees and the aggregate of such payments made
during the financial year does not exceed two lakh fifty thousand rupees;         
(ii) the information in Part B of Form No.15CA for
payments other than the payments referred in clause (i)
6. Information
to be required from the client 
A. 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)
B.  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
C.  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)
D. 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
E.  Others 
1. Father’s Name of the Signing Person
2. Designation Of The Signing Person
F.      a.
Form 10f Duly Filled By the Authorised Person Of The Remittee.
b. Tax Residency Certificate From The Remittee (Tax
Registration Of The Country In Which Remittee Is Registered)
c. Certificate That The Remittee Does Not Have Any
Permanent Establishment In India. This Is Mandatory If The Income Is A Business
Income And Not Chargeable To Tax As Per DTAA If There Is No P.E In India.
This Is Required If Any Benefit Under DTAA Is Taken,
Whether By Way Of Lower Rate Of Deduction Of Tax At Source Or No Deduction Of
Tax At Source As Per DTAA.
This Is Required If Any Benefit Under DTAA Is Taken,
Whether By Way Of Lower Rate Of Deduction Of Tax At Source Or No Deduction Of
Tax At Source As Per DTAA.

7. What are the impacts of new Rule
(applicable from 1st October, 2013)?
a.     Department added 28 types of payments for which no
information is required to be furnished at all.
b.    Form 15CB is not required where
Part A of Form 15CA is to be filled in, i.e., in case of small payments.
c.     In case of other payments,
it appears that either an order or a certificate of the Assessing Officer u/s.
197/195(2)/195(3) must be obtained, or a certificate of the Chartered
Accountant should be obtained.
d.    Sub-rule (2) of the revised Rule
37BB mandates that Form 15CA shall be furnished to the authorised dealer prior
to remitting the payment.
e.     The revised Rule 37BB casts
a duty on the authorised dealer to furnish Form 15CA submitted by the remitter
to an income-tax authority for the purposes of any proceedings under the
Income-tax Act.
f.     The revised Forms state
that in the absence of the PAN of the recipient, provisions of section 206AA
shall apply.

g.    The revised Form 15CB requires
detailed enumeration of the taxability of the amount under the Income-tax Act,
without giving any effect to the DTAA. Where DTAA provisions are sought to be
applied, the details of the Tax Residency Certificate, applicable DTAA and its
relevant article, as also tax liability under the DTAA are to be
furnished.  The nature of remittance is divided as — for royalties, FTS,
interest, dividend; on account of business income; on account of short-term and
long-term capital gains; and any other remittance.
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