Form 15CA and Form 15CB: An important tool for Foreign Remittance

1. What are Form 15CA and 15CB?

Form 15CA: This Form is to be filed by the taxpayer while making any foreign remittances or payments. It is important to be filed except for cases as prescribed in Rule 37BB of the Income Tax Act.

Form 15CB: This form is to be filed by the taxpayer as a certification from a Chartered Accountant. Form 15CB is required for filing the various parts of the Form 15CA.

The Income Tax Department in an initiative to make the taxation process easier on the foreign remittances has revised the rules and regulations relating to the filing and submission of **Form 15CA and 15CB **for the taxpayers. These rules have come into effect from 1st April 2016. The following changes have been made to the forms-

· The taxable person is not required to furnish Form 15CA and Form 15CB for any remittances that do not require prior approval of the Reserve Bank of India.

· All the payments that have been prescribed in Rule 37BB of the act, does not require the furnishing of the forms.

· Form 15CB is required to be furnished only on the payments that have been made to the No-Residents and in which the payments have exceeded the amount of Rs.5 Lakh in total.

2. What must be done by the taxpayer when the payment made is below Rs.5 Lakh?

For, all the remittances made to foreign by the taxable person, which are below Rs.5 lakh, the information is required to be filed in Part-A of Form 15CA.

3. What must be done by the taxpayer when payments made exceeds Rs.5 Lakh?

For all the foreign remittances that exceed Rs.5 lakh, the following must be done-

· Furnishing Part-B of Form 15CA

· Furnishing Part-C of Form 15CA

· A Certificate from Chartered Accountant in Form 15CB

4. What must be done when the payment made is not chargeable to tax under the Income Tax Act?

In case the remittances made by the taxpayer are not chargeable to any taxes as per the IT Act, the following must be done-

· Furnishing Part-D of Form 15CA

· In cases that do not require prior approval of the RBI, no form is required to be furnished

Related Articles: Form 15CB and 15CB: Complete Details

5. List of payments where Form 15CA and Form 15CB is not required:

As per Rule 37BB, there are about 33 different types of foreign remittances that do not require furnishing Form 15CA and Form 15CB. These are as follows-

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

10. Intermediary trade

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.)

20. Postal Services

21. Construction of projects abroad by Indian companies including import of goods at the 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.