What are the Form 15CA Provisions

What are the Form 15CA Provisions

Form 15CA is a Declaration of Remitter and is used as a tool for collecting information in respect of payments which are chargeable to tax in the hands of recipient non-resident. This is starting of an effective Information Processing System which may be utilized by the Income tax Department to independently track the foreign remittances and their nature to determine tax liability. Authorized Dealers/ Banks are now becoming more vigilant in ensuring that such Forms are received by them before remittance is affected since now as per revised Rule 37BB a duty is casted on them to furnish Form 15CA received from remitter, to an income-tax authority for the purposes of any proceedings under the Income-tax Act.

Why Form 15CB?

The answer is Form 15CB. Chargeability can be ascertained and certified by obtaining the Certificate from a Chartered Accountant in Form no. 15CB. This certificate has been prescribed under Section 195(6) of the Income tax Act and is an alternate channel of obtaining Tax clearance apart from Certificate from Assessing Officer.

But No reporting in Form 15CA is to be made in case of the following nature of foreign remittances w.e.f 01.10.2013 has been provided in Rule 37BB.

SPECIFIED LIST  

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

S0202

Payment- for operating expenses of Indian shipping companies operating abroad.

8

S0208

Operating expenses of Indian Airlines companies operating abroad

9

S0212

Booking of passages abroad -Airlines companies

10

S0301

Remittance towards business travel.

11

S0302

Travel under basic travel quota (BTQ)

12

S0303

Travel for pilgrimage

13

S0304

Travel for medical treatment

14

S0305

Travel for education (including fees, hostel expenses etc.)

15

S0401

Postal services

16

S0501

Construction of projects abroad by Indian companies including import of goods at project site

17

S0602

Freight insurance – relating to import and export of goods

18

S1011

Payments for maintenance of offices abroad

19

S1201

Maintenance of Indian embassies abroad

20

S1 202

Remittances by foreign embassies in India

21

S1301

Remittance by non-residents towards family maintenance and-savings

22

S1302

Remittance towards personal gifts and donations

23

S1303

Remittance towards donations to religious and charitable institutions abroad

24

S1304

Remittance towards grants and donations to other Governments and charitable institutions established by the Governments.

25

S1305

Contributions or donations by the Government to international institutions

26

S1306

Remittance towards payment or refund of taxes.

27

S1501

Refunds or rebates or reduction in invoice value on account of exports

28

S1503

Payments by residents for international bidding”.

 

Whether Form 15CA has to be submitted in all cases since the Bankers demand it invariably?

In this regards the attention is invited to the Headings of the Form which provides as under:

“Information to be furnished for payments, chargeable to tax, to a non-resident not being a company, or to a foreign company”

“(To be filled up if the remittance is chargeable to tax and does not exceed fifty thousand rupees and the aggregate of such remittances made during the financial year does not exceed two lakh fifty thousand rupees)”

As can be seen from above the Form clearly states that it needs to be filled only if the remittance is chargeable to tax in India. Therefore on the first blush it appears crystal clear that Form 15CA is not required to be filled if the remittance/ payment to non-resident are not chargeable to tax.

What stand customer can take if Bank demand Form 15CA but service is not taxable?

In such cases, the possible recourse is to submit a declaration in form of a note to Bank stating the nature of remittance and reason as to why it is not chargeable to tax and consequently exempted from the submission of Form 15CA.

Conclusion :

Once it is ascertained that Form 15CA and 15CB have to be made then one should ascertain the part of Form 15CA to be filled by the assessee. This can be understood by reading the Rule 37BB. Form 15CB is not required where Part A of Form 15CA is to be filled in, i.e., in case of small payments. In case of other payments, it appears that either an order or a certificate of the Assessing Officer u/s. 197/195(2)/195(3) must be obtained, or a certificate of the Chartered Accountant should be obtained. It is mandatory that Form 15CA shall be furnished to the authorised dealer prior to remitting the payment. The revised Rule 37BB casts a duty on the authorised dealer to furnish Form 15CA submitted by the remitter to an income-tax authority for the purposes of any proceedings under the Income-tax Act.