Applicability of Form 15CA & 15CB

Introduction

• Form 15CA is a declaration of remitter used as a tool for collecting information in respect of payments that are chargeable to tax in the hands of the recipient non-resident. This is starting of an effective information processing system that may be utilized by the Income Tax Department to independently track the foreign remittances and their nature to determine tax liability.
• Form 15CB is required to be signed by a Chartered Accountant. This is a kind of certification regarding rates and the right kind of tax paid by you. Certain details are required from Form 15CB at the time of filing Form 15CA. Chargeability can be ascertained and certified by obtaining a certificate known as Form 15CB from a Chartered Accountant.

Section 195(6)

The person responsible for paying to a non-resident, not being a company, or to a foreign company, any sum, whether or not chargeable under the provisions of this Act, shall furnish the information relating to the payment of such sum, in such form and manner, as may be prescribed.

Crux of Section 195(6)

If any remittance to a non-resident then refer Rule 37BB of Income Tax Rules, 1962.

Rule 37BB

(1) The person responsible for paying to a non-resident, not being a company, or to a foreign company, any sum chargeable under the provisions of the Act, shall furnish the following, namely:

• The information in Part A of Form No.15CA , if the amount of payment or the aggregate of such payments , as the case may be, made during the financial year does not exceed five lakh rupees ;
• Payments other than the payments referred in clause (i), the information
• In Part B of Form No.15CA after obtaining a certificate from the Assessing Officer under section 197; or an order from the Assessing Officer under sub-section (2) or sub-section (3) of section 195 .
• In Part C of Form No.15CA after obtaining a certificate in Form No. 15CB from an accountant as defined in the Explanation below sub-section (2) of section 288.

(2) The person responsible for paying to a non-resident, not being a company, or to a foreign company, any sum which is not chargeable under the provisions of the Act , shall furnish the information in Part D of Form No.15CA.

(3) Notwithstanding anything contained in sub-rule (2), no information is required to be furnished for any sum which is not chargeable under the provisions of the Act, if,—

• The remittance is made by an individual and it does not require prior approval of Reserve Bank of India as per the provisions of section 5 of the Foreign Exchange Management Act, 1999 (42 of 1999) read with Schedule III to the Foreign Exchange (Current Account Transaction) Rules, 2000; or
• The remittance is of the nature specified in column (3) of the specified list below.

(4) The information in Form No. 15CA shall be furnished,

• electronically under digital signature in accordance with the procedures, formats and standards specified by the Principal Director General of Income-tax (Systems) under sub-rule (8) and thereafter printout of the said form shall be submitted to the authorised dealer, prior to remitting the payment ; or
• electronically in accordance with the procedures, formats and standards specified by the Principal Director General of Income-tax (Systems) under sub-rule (8) and thereafter signed printout of the said form shall be submitted to the authorised dealer, prior to remitting the payment.

(5) An income-tax authority may require the authorised dealer to furnish the signed printout of Form No.15CA referred to in clause (ii) of sub-rule (4) for the purposes of any proceedings under the Act.

(6) The certificate in Form No. 15CB shall be furnished and verified electronically in accordance with the procedures, formats and standards specified by the Principal Director-General of Income-tax (Systems) under sub-rule (8).

(7) The Authorised Dealer shall furnish a quarterly statement for each quarter of the financial year in Form No.15CC to the Principal Director General of Income-tax (Systems) or the person authorised by the Principal Director General of Income-tax (Systems) electronically under digital signature within fifteen days from the end of the quarter of the financial year to which such statement relates in accordance with the procedures, formats and standards specified by the Principal Director General of Income-tax (Systems) under sub-rule (8).

(8) The Principal Director General of Income-tax (Systems) shall specify the procedures, formats and standards for the purposes of furnishing and verification of Form 15CA, Form 15CB and Form 15CC and shall be responsible for the day-to-day administration in relation to the furnishing and verification of information, certificate and quarterly statement in accordance with the provisions of sub-rules (4), (6) and (7).

For the purposes of this rule 'authorised dealer' means a person authorised as an authorised dealer under sub-section (1) of section 10 of the Foreign Exchange Management Act, 1999 (42 of 1999) .]

CRUX OF RULE 35BB