So, you are planning to make payment or money transfer outside of India, we need to follow certain rules and compliances for such transactions and transfers.
Certain Foreign remittances have tax implications which sometimes are missed out by the tax payers. As per the Income Tax Act, tax is required to be deducted for any sum which is taxable under the Act. So when a resident taxpayer decides to remit any money to a bank account outside India, the Banks will check if:-
a) Tax has been paid on such remittance
b) If no tax is paid, a certificate has been obtained from a Chartered Accountant or the Assessing Officer.
Let’s have a basic understanding of Form 15CA & Form 15CB, their requirements and applicability:
Form 15CA is a declaration of the person who is transferring the money, which includes the information in respect of funds which are getting transferred are chargeable to tax in the hands of recipient non-resident. As per the Income Tax Act, it is the responsibility of the Banker to ensure that such form is collected from the remitter before any transfer took place.
Form 15CA needs to be filled only if the remittance is chargeable to tax in India. If remittance/payment is not chargeable to NRI then Form 15CA is not required.
Income Tax Department has provided an online facility to file Form 15CA. The proof of online submission should be printed out and is required to be given to the Bank as a proof of tax clearance from the tax department.
Form 15 CB is Form which is required to be signed by a Chartered Accountant. This is a kind of certification regarding rates and right kind of tax paid by remitter. Certain details are required from Form 15CB at the time of filing Form 15CA.
This certificate has been prescribed by the Income Tax Act as an alternative of obtaining tax clearance apart from certificate from Assessing Officer. Form 15CB is the Tax Determination Certificate where the Issuer CA examines the remittance having regard to chargeability provisions under the Act along with provisions of Double Tax Avoidance Agreements (DTAA) with the Recipient’s Residence Country.
Whereas 15 CA is not mandatory for payments where such transactions are not subject to tax, obtaining 15CB is suggested by many bankers in all cases.
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 (Company/Firm/Others)
1. Name and status of the remittee
2. Address of the remittee
3. Country of the remittee
4. Principal place of the business of the remittee
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
1. Name of bank of the remitter
2. Name of branch of the bank
3. BSR Code of the bank
1. Father’s name of the signing person
2. Designation of the signing person
1. Tax residency certificate from the remittee.
2. Certificate that the remittee does not have any permanent establishment in India.