File form 15CA and 15CB online – A step by step process

In this article my aim is to explain the detailed procedure vis-a-vis how a non-resident can get his 15ca prepared & file online; along with a 15cb certificate to transfer funds from his bank account.

What are forms 15 CA and CB all about?

Transferring funds outside India and understanding taxes involved with it, is never a simple issue for NRIs. But when you are trying to pay money across international boundaries it can become more confusing. When paying for salaries, goods or services rendered to a non-resident person or a non-resident entity, there are certain considerations to bear in mind regarding taxes. And with constant rule changes, it’s tough to know what forms or paperwork you need to fill out and where to submit it.

In the case of India, if you are looking to remit any taxable money to a foreign individual or company, you need to complete forms ’15 CA/CB’, in accordance to the rules set in the Income Tax Act of 1961. Note that as of October 2013, this is only applicable on taxable transfers, such as salary payments or rents. It is not necessary to fill out one of these forms every time you want to send your cousin in Germany a few bucks.

If you are, however, transferring money to a foreign company or individual that is liable for tax, it is an essential legal requirement that you fill out these forms, and essential that you do so before the payment is made. The reasoning is quite simple, if tax – including tax deductible at source (TDS) – is to be paid, the treasury needs to know and be able to extract it before the money leaves the country. Else tax will still be owed, but it can be costly and time consuming for the treasury to pursue.

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How to prepare and e-file online?

Form 15CA has to be filled electronically in the website designated by the Income-tax Department website, printed, signed and submitted before remitting the payment.

NOTE: 15CA form can be filed at the NSDL site, ONLY AFTER you have obtained a certificate from a registered chartered accountant. It his duty to scrutinize your papers and transaction and certify that your dealings are clean and that the banker can allow you to remit or transfer money outside India. One such reliable tax and accounting firm in India is nriInvestIndia, that can issue you a 15cb certificate within 2 days.

Preparing the 15cb as per the latest format can be very confusing, thus it’s advisable to get some sort of professional help.

When filling the form as a remitter, you will need:

  • Your Permanent Account Number (PAN) and Tax Deduction and collection Account Number (TAN) allotted by the Income Tax Department.
  • If you don’t have a TAN, it is mandatory to quote your PAN.
  • Details in at least two address fields.
  • Name of the entity doing the remittance should be mentioned in the “Name of remitter” field.
  • Don’t fill the Area code, AO type, Range code or AO number. These fields will be filled by the system based on your PAN or TAN.


Points to note:

Working out whether you need to submit, however, is not so simple. The following rules are important to be aware of:

  • First and foremost, we are talking about remittances where tax needs to be paid.
  • There is a specified list (see below) of activities which do not need any evidence submitted.
  • For payments during a single financial year totaling over Rs.50,000 but less than Rs.250,000, you need to complete part A of form 15 CA, and you do not need to obtain Form 15CB.
  • For all other taxable payments, you need to report in Part B of form 15CA, and it is mandatory to obtain the certificate of a chartered accountant in form 15 CB.

Exempted areas:

According to the Notification No. 67/2013 [F. NO. 149/119/2012-SO (TPL)]/SO 2659(E), dated 2-9-2013, list of activities for which you have to submit no further information are:

  • Indian investment abroad -in equity capital (shares)
  • Indian investment abroad -in debt securities
  • Indian investment abroad -in branches and wholly owned subsidiaries
  • Indian investment abroad -in subsidiaries and associates
  • Indian investment abroad -in real estate
  • Loans extended to Non-Residents
  • Payment- for operating expenses of Indian shipping companies operating abroad.
  • Operating expenses of Indian Airlines companies operating abroad
  • Booking of passages abroad -Airlines companies
  • Remittance towards business travel.
  • Travel under basic travel quota (BTQ)
  • Travel for pilgrimage
  • Travel for medical treatment
  • Travel for education (including fees, hostel expenses etc.)
  • Postal services
  • Construction of projects abroad by Indian companies including import of goods at project site
  • Freight insurance – relating to import and export of goods
  • Payments for maintenance of offices abroad
  • Maintenance of Indian embassies abroad
  • Remittances by foreign embassies in India
  • Remittance by non-residents towards family maintenance and-savings
  • Remittance towards personal gifts and donations
  • Remittance towards donations to religious and charitable institutions abroad
  • Remittance towards grants and donations to other Governments and charitable institutions established by the Governments.
  • Contributions or donations by the Government to international institutions
  • Remittance towards payment or refund of taxes.
  • Refunds or rebates or reduction in invoice value on account of exports
  • Payments by residents for international bidding

NOTE: Please be advised that filing such paperwork with the Income tax department can be confusing. Thus, a help from a professional CS (company secretary) or CA (chartered accountant) should be rendered.


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e-File yourself (do everything yourself)

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How can a NRI benefit from life insurance policy?

Life insurance has remained one of the most favorite instruments of investment in India. Since the demand is so high, there are a number of policies to cater to various needs. Most people in India who dabble in investments hold at least one and very often more number of life insurance policies. So, the question arises that if you are a NRI, whether you too can invest in this vehicle.

Salient facts regarding NRI investment in life insurance in India

Here are some of the most important facts regarding the NRI investment in life insurance in India:

  • NRI are allowed to buy life insurance policies in India.
  • You can buy the insurance policy when you come to visit India, or you can buy it from the country of your residence. Written communication between you and the insurance provider is necessary to buy your policy from abroad.
  • When you buy the insurance policy from outside India (from your country of current residence), you may have to bear some additional costs. For example, you will have to bear the cost of the medical examination and the cost of mailing it in. However, if you buy the policy while you are in India, the cost of the medical examination is inbuilt into the cost of the policy.
  • If the policy is denoted in Rupees, you will have to pay premium in Rupees. If the policy is denoted in foreign currency, you will have to pay the premium in foreign currency. All companies do not offer the foreign currency option.
  • The premium can be paid in the following three different ways:

o   You can send remittances in foreign currency.

o   If the premium is to be paid in Rupees, you can use NRO account to pay the premium.

o   If the premium is to be paid in foreign currency, you can use NRE account or FCNR account for the purpose.

  • You pay the same premium as a resident of India.
  • If risks are deemed to be higher in the country of your residence, then you may be charged a higher premium.
  • The regulations regarding the maximum sum assured vary from company to company. In case of LIC, if you get your medical examination done in the country of your residence, you can have a maximum sum assured of Rs. 1 crore. But if you have your medical examination done in India, you can get a higher cover.
  • Life insurance policies are valid no matter where the death occurs.
  • Only that amount of the life insurance proceeds are repatriable which is equivalent to the amount of the premium that have been paid in the foreign currency. So, if the entire premium has been paid in Indian currency through NRO account, the benefits cannot be repatriated.
  • If you took out the life insurance policy before your status changed to that of a NRI, this does not affect the status of the policy. Only the amount of premium which has subsequently been paid in foreign currency can be repatriated.
  • Life insurance benefits are tax free in India.
  • However, the benefits will be taxed in the country of residence according to their tax laws.
  • Similarly, withdrawals are also subject to the tax regulations of the country of your residence.

Should NRIs take out life insurance policies in India?

The ultimate choice is entirely personal as there are both advantages and difficulties for NRI to take out life insurance policies in India. However, it should be kept in mind that tax regulations in the country of your residence will determine to a large extent how much benefit you derive from this instrument of investment.

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How and where to invest in India?

Non resident Indians or NRIs are looking more and more towards their home country to invest their money. NRI is defined as anybody who resides outside India for major part of the year because of his employment. Since 1950s, Indian economy has been growing steadily and investors from all over the world have expressed interest in taking advantage of this growth. After the reforms of 1990 with the commencement of the era of liberalization, India has become one of the favorite investment destinations of NRIs.


Why invest in India?

NRIs will find it beneficial to invest in India because of the following:

·         Since liberalization, regulations have been relaxed and scope for investment has increased significantly. Taxation policy now favors NRIs.

·         Indian economy shows steady growth based on real advancement. Unlike tax havens the growth of the country is based on tangible results and investors are likely to earn high returns.

·         The process of investing has become much easier as most transactions are now net based.

·         Many Indian banks provide necessary loans to NRIs like home loans.

·         Sentimental reasons are also active, especially for those who have close relatives living in India.

The procedure

In order to invest in India, the following steps will have to be taken:

·         If you decide to invest in mutual funds, then you will first have to select the fund house through which to invest. If you are living in USA, finding a good fund house may be difficult. This is because, according to US law, if a fund house has more than 15 clients residing in USA, it has to follow American regulations in addition to that of SEBI. Fund houses therefore avoid American residents to avoid this dual regulation. If you are living in any other country, you can choose your fund house easily. If you live in America, your choice will be restricted to only those fund houses which take American clients.

·         The next step is to open a NRE or NRO account through which you can carry out your investments.

·         Open a demat account with a broker of your choice – someone who can advise you regarding investment in India.

·         Keep track of the money. This can be difficult, especially if the portfolio is well diversified. A common practice is to confer power of attorney on a local representative.

·         Finally, keep in mind your tax obligations, both in India and the country where you are currently residing.

In order to complete any of the steps, you must first obtain a PAN from India. As an NRI, this is offered at http://www.nripan.com/

Where to invest in India?

Now that you know broadly how to invest in India, you need to find out which market you should put your money in. the choices are as follows:

1.    You can open your own account in Indian banks as permitted by the Reserve Bank of India. Then these accounts can be used to invest in various savings and investment schemes. This option is particularly suitable for those who have blood relatives living in India like elderly parents because joint account holding is also permitted. In addition to saving and deposit schemes, this account can also be used to buy properties in India.

2.    NRIs can invest in various growth and long term investment options including mutual funds, shares, debentures, Government securities, National Savings Certificate and IPOs. However, you need to check the current regulations to know more about limit of investment, type of company etc.

3.    Finally, land and property are the best investment if you are looking for security. NRIs cannot buy agricultural land in India. However, you can buy houses, bungalows, flats and other properties – both private and for business.