Form 15CA and Form 15CB

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Any payment or any remittance done to a Non-resident is subject to many rules and regulations. 

Section 195 of the Income tax act, 1961 makes it compulsory to deduct the Income-tax from payments made to Non-Resident. The purpose of deduction of Income Tax at source and its subsequent reporting is to ensure that taxes are collected on time.

It is the responsibility of the Payer (Payer is the person who is responsible for making any payment or any remittance to Non-resident) to furnish a Form 15CA and Form 15CB. 

The Form 15CB regulates the tax deduction as per the income tax rules and also prohibits the double tax provision. The filing of Form 15CB requires an attestation from a Chartered Accountant.

So when a person has to make any payment or remit any money to non-resident, the bank will have to verify the payment of tax and act accordingly.


Form 15CA

A person making the remittance (a payment) to a Non Resident or a Foreign Company has to submit the form 15CA.

Form 15CA is a declaration of remitter which is used as a mechanism for collecting information in respect of payments which are liable to tax on behalf of recipient non-resident. This form assists the Income Tax Department in keeping eye on foreign remittances & their tax accountability. The Rule 37BB defines it as a duty of authorized dealers/banks to confirm the receptivity of such forms from the remitter.

E-filing of this form is an initiative for an effective & efficient Information Processing System which would facilitate the Income-tax Department greatly in tracking the foreign remittances accurately and effortlessly.

The Financial Institutions are now keeping a Hawkeye on all such transactions and forms prior to the effectiveness of remittance. The revised Taxation Rule, 37BB, binds all the Financial Institutions to furnish Form 15CA to an income-tax authority for further proceedings after receiving it from remitter.

Note:

  • It is mandatory to upload Form 15CB before filling Part C of Form 15CA. To present the details in Part C of Form 15CA, the acknowledgment number of e-Filed Form 15CB should be given.
  • Form 15CB is to be filled only when the remittance amount exceeds Five Lakh Rupees during the Financial Year under the income tax act 1961.

Form 15CB

Form 15CB is the Tax Determination Certificate issued by a Chartered Accountant ensuring that the provisions of Double Taxation Avoidance Agreement and the Income Tax Act have been compiled with in respect of tax deductions while making the payments. 

CA verifies the details and nature of remittance with respect to the provisions under Section 5 and 9 of the Income Tax Act coupled with the provisions of Double Tax Avoidance Agreements.

In this form, a CA validates the details of the payment, TDS rate and TDS deduction as per the norms mentioned in Section 195 of the Income Tax Act, if any DTAA is applicable, and other details of nature and purpose of the remittance.

Form 15CB liability could be examined by accessing the certificate obtained from a CA in the Form 15CB. The requirement of the certificate has been stated and prescribed in Section 195(6) of the Income Tax Act.

Applicability of Form 15CA and Form 15CB 

Part A of Form 15CA

Part A of the Form is filed when the aggregate of remittance does not exceed Five lakh rupees in that particular Financial Year. Irrespective of whether remittance amount is taxable or not under the income tax Act 1961.

Part B of Form 15CA

Part B of the Form 15CA is filled when the remittance amount exceeds five lakh rupees in the Financial Year and when an order /certificate u/s 195(2)/ 195(3)/ 197 of Income Tax Act has been acquired from the Assessing Officer (Whether Nil rate or Lower rate Certificate).

Part C of Form 15CA

Part C of the Form 15CA is filled when the remittance is chargeable under Income Tax Act and the amount in the Financial Year exceeds Five Lakh Rupees during the Financial Year and a certificate in Form 15CB from a Chartered Accountant has been obtained. 

Part D of Form 15CA

The Part D of Form 15CA is filled when the remittance is not taxable under Income Tax Act (other than payments referred to in rule 37BB(3) by the person referred to in rule 37BB(2)).

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