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Compliance for foreign remittances- 15CA /CB

So, do you need to make any payment (remittance) to a Non- resident or a foreign company? It has some legal procedures to be followed.

As per the income tax act any person responsible to make a remittance to a Non- resident or a foreign company chargeable to tax has to submit form 15CA. This a declaration form by the remitter which can be appropriate for the Income Tax department in tracking the foreign remittances and determining the tax liability. Banks are now more cautious in ensuring that such forms are received by them before making such remittance to a non resident. Form 15CA is submitted online.

However, in certain cases before uploading form 15CA online a certificate by a Chartered Accountant  certifying details of the payment, TDS rate ,if any DTAA (Double Tax Avoidance Agreement) is applicable, and other details of nature & purpose of the remittance is required to be declared in form 15 CB.

Form 15CA has been divided into four parts. The applicable parts of form 15CA are as follows.

Part -A     if the amount of payment or the aggregate of such payments made during the financial year doesn’t exceed Rs. 5, 00,000

Part- B     for any payment exceeding Rs. 500,000, if a certificate or an order from the Assessing officer is obtained.                     

Part-C     If the amount of remittance or aggregate of such remittance made during financial year exceed Rs.500, 000 a certificate in Form 15CB is obtained by a Chartered accountant.                            

Part-D     If the remittance is not chargeable to tax

It is to be noted that no information is required to be furnished for any sum which is not chargeable under the provisions of the Act, if,

  • The remittance is made by an individual and it does not require prior approval of RBI as per FEMA provisions.
  • the remittance is of the nature specified in “SPECIFIED LIST”

List of items where Form 15CA and Form 15CB are not required as per Rule 37BB of the Income Tax Act, Rules.

Sl. 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. S0202 Payment for operating expenses of Indian shipping companies operating abroad
13. S0208 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.

 

The list of document required for the purpose of submission of 15CA & 15CB

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

For further queries please visit our website www.makeyourtax.com or you can contact us at info@makeyourtax.com

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