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.
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.
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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