Form 15CA & 15CB, Its Provisions, Related Rules and Filing

Form 15CA & 15CB, Its Provisions, Related Rules and Filing

INCOME ACT, 1961:
As per Sec.195(6) of 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.
INCOME TAX RULES:
Rule 37BB defines the manner to furnish information in form 15CB and making declaration in form 15CA .
Why Form 15CA:
It a tool for collecting data about foreign remittances. It contains all information in respect of payments made to Non-Residents.
Points of consideration:
• It is to be submitted electronically using digital signatures but may also be submitted without DSC as per procedures.
• Submission of Form 15CA is mandatory before the remittance is made.
• Signed Printouts are required to be submitted with the Authorised Dealer.

Why Form 15CB:
• It is a Channel of obtaining tax clearance apart from certificate from Assessing Officer.
• There is no condition to obtain such certificate when the remittance is not chargeable to tax. This 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(DTAA) with the Recipient’s Residence Country.

LEVELS OF INFORMATION TO BE FURNISHED(A SUMMARY):
(Differentiation on the basis  of level has been done only to facilitate better understanding of the amount of information furnishable).
LEVEL 1: Nothing To Be Furnished for any sum not chargeable to tax, if:
(i)Remittances are not chargeable to tax and are specified under rule 37BB.
OR
(ii)Remittances are by and Individual and No approval of RBI required under FEMA.
LEVEL 2: PART D: When remittance is not chargeable to tax(other than those covered above)
LEVEL 3: PART A: (i) When chargeable to tax and
(ii)Remittance amount < 500000
LEVEL 4: PART B: (i) When chargeable to tax,
(ii)Remittance amount > 500000 And
(iii) A.O. Order U/S 195(2), 195(3), 197 has been passed.
LEVEL 5: PART C: (i) When chargeable to tax,
(ii) Remittance Amount > 500000 and
(iii) Form 15CB also required to be furnished.