A huge portion of economy is dependent on import and export businesses. For making payments outside India compliances of certain governmental authorities like RBI, FEMA, Income Tax Department etc need to be ensured.One of such compliance of is submitting the form 15CA and 15CB. As per the revised rules relating to preparation & submission of Form 15CA and Form 15CBForm:
- 15CA and 15CB will be not be required to be furnished by an individual for remittance, which does not require RBI approval.
- List of payments of specified nature mentioned in Rule 37BB, which do not require submission of Forms 15CA and 15CB, has been expanded from 28 to 33 including payments for imports.
- Form No. 15CB will only be required for payments made to non-residents, which are taxable and if the payment exceeds Rs. 5 lakhs.
The verification of these forms can be done only through digital signatures. There are four different parts of Form 15CA, which should be submitted,based on below mentioned criteria:
- Amount of total payments during the entire year
- What is the tax treatment of payment to be made?
Four Parts of form 15CA
Part – A
- This is required to be filed when the payment is chargeable to tax under the provision of Income Tax Act, 1961 and the payment or aggregate of such payment does not exceed Rs. Five Lakhs during the financial Year
Part – B
- This is required to be filed when the payment is chargeable to tax under the provision of Income Tax Act, 1961 and the payment or aggregate of such Payment exceed Rs. Five Lakhs during the financial Year and Certificate of lower deduction of TDS u/s 195(2)/ 195(3)/ 197 of the Act has been obtained from the Assessing officer
Part – C
- This is required to be filed when the payment is chargeable to tax under the provision of Income Tax Act, 1961 and the payment or aggregate of such payment exceed Rs. Five Lakhs during the financial Year. Aside, a Certificate in Form 15CB has been obtained from a Chartered Accountant. Chargeability of payment is to be decide on the basis of various provision of the Income Tax Act, 1961 and Double Taxation Avoidance Agreement (DTAA) between the Indian Government and government of the country in which recipient of payment is resident.
Part – D
- This is required to be filed when the payment is not chargeable to tax under the provision of Income Tax Act, 1961 and the payment is in the nature other than payments referred in rule 37BB(3) by the person referred in rule 37BB(2).
Following information is required for the submission of form 15CA:
Recipient of payment
- PAN (if available)
- Email ID and Phone Number in absence of PAN
- Country to which payment is required to be made
Person who is required to make payment
- PAN and TAN (if Available)
- Email ID and Contact Number
- Bank account details from which payment is required to be done
- Details of person who is authorized to submit the forms to income tax department.
As specified in the rule 37BB, if the payment is required to be made by an individual for the following mentioned nature and no prior approval of RBI is required for the payment then in that scenario form 15CA and 15CB is not required to be submitted. List of nature of payment is tabulated here under:
|Sl. No.||Nature of payment|
|1||Indian investment abroad – in equity capital (shares)|
|2||Indian investment abroad – in debt securities|
|3||Indian investment abroad – in branches and wholly owned subsidiaries|
|4||Indian investment abroad – in subsidiaries and associates|
|5||Indian investment abroad – in real estate|
|6||Loans extended to Non-Residents|
|7||Advance payment against imports|
|8||Payment towards imports – settlement of invoice|
|9||Imports by diplomatic missions|
|11||Imports below Rs.5,00,000 – (For use by ECD offices)|
|12||Payment for operating expenses of Indian shipping companies operating abroad|
|13||Operating expenses of Indian Airlines companies operating abroad|
|14||Booking of passages abroad – Airlines companies|
|15||Remittance towards business travel|
|16||Travel under basic travel quota (BTQ)|
|17||Travel for pilgrimage|
|18||Travel for medical treatment|
|19||Travel for education (including fees, hostel expenses etc.)|
|21||Construction of projects abroad by Indian companies including import of goods at project site|
|22||Freight insurance – relating to import and export of goods|
|23||Payments for maintenance of offices abroad|
|24||Maintenance of Indian embassies abroad|
|25||Remittances by foreign embassies in India|
|26||Remittance by non-residents towards family maintenance and savings|
|27||Remittance towards personal gifts and donations|
|28||Remittance towards donations to religious and charitable institutions abroad|
|29||Remittance towards grants and donations to other Governments and charitable institutions established by the Governments|
|30||Contributions or donations by the Government to international institutions|
|31||Remittance towards payment or refund of taxes|
|32||Refunds or rebates or reduction in invoice value on account of exports|
|33||Payments by residents for international bidding.Bottom of Form|
From the above discussions, it is evident that for making payments outside India technical evaluation of the nature of transactions including taxation matters need to be thoroughly taken care of. All these require expert advise so that non-compliance and penalties can be avoided. Therefore, it is advisable to avail the services of a Chartered Accountant for adhering to compliances.
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