All You Need To About Form 15CA and Form 15CB

Introduction

In the course of business, it happens that many payments are made outside India. When payments are made outside India, there are certain compliances that need to be followed and tax deduction is required for any amount that is taxable under the Income Tax Act. The purpose of this compliance is to collect information regarding payments that are chargeable to tax in the hands of recipient NRIs. An NRI is required to file Form 15CA and Form 15CB for any payment made outside India. Form 15CB along with Form 15CA needs to be filed online on the official website of the Income Tax Department.

What is Form 15CA?

Form 15CA is a declaration made by the remitter stating that he has deducted tax from any payment made to a non-resident. Form 15 CA needs to be filed by the remitter - the person making the payment to the NRI or foreign company. It is also used as a tool to collect information regarding payments that are chargeable to tax.

Through Form 15 CA, the Income Tax Department keeps track of all foreign remittances/payments and also their taxability. As per Income Tax Rule 37BB, it is the responsibility and duty of authorized banks or dealers to ensure that they receive such forms from the remitter. Income Tax Form 15 must be filed online in CA Income Tax Department. Also, along with Form 15 CA, 15 CB needs to be filed with the Income Tax Department. However, Form 15CB must be accompanied by an accountant’s certificate in Form 15CB.

What is Form 15 CB?

While Form 15 CA is a declaration, Form 15 CB is a certificate issued by a chartered accountant. A Chartered Accountant has to ensure that all the provisions of the Income Tax Act and Double Taxation Avoidance Agreement are complied with in respect of tax deduction while making payments.

What is the applicability of Form 15CA and Form 15CB?

If the remittance amount is not chargeable to tax, no form is required.

• If the remittance is covered under the specified exemption list, only Part D of Form 15CA has to be submitted.
• Where the remittance is less than Rs. 5 lakhs in a particular financial year - only Form 15CA - Part A is to be submitted.
• Where the remittance is exceeded to Rs. 5 lakh - Form 15CA - Part C and Form 15CB have to be submitted.
• Where the remittance is exceeded to Rs. 5 lakhs and certificate under Section 195(2)/195 (3)/197 of Income Tax has been obtained - Form 15CA - Part B is to be submitted.

Redesigned Form 15 CA and Form 15 CB submission process

The IT Department has launched a new redesigned submission process for Form 15 CA and Form 15 CB. This decision has been taken based on various responses from corporates and professionals across India. It is believed that these changes will simplify the entire Form 15 CA and Form 15 CB filing cycle from form preparation to submission to verification process. Let’s look at the significant changes in the process.

• For multiple filing of Form 15CA/CB, it is no longer mandatory or necessary to assign the same CA in a particular financial year.
• Hence, appointment of Chartered Accountant for Form 15 CB is a one-time activity for a particular financial year.
• A CA can now proceed with Form 15 CB for both the remitee and the remitter without the need for the taxpayer to fill up Part C of Form 15 CA and submit it to a Chartered Accountant, after a single assignment is made in a year. Hence, here the earlier process of multiple acceptance and rejection for each form is eliminated and the entire process is simplified.
• Chartered Accountants can now access Form 15CB directly from IT Forms functionality for filing instead of work list for action.
• The offline/bulk mode of submission process has been enabled from 4th October. Taxpayer can generate XML files using Java-based offline utility. The offline utilities are available on the portal in the "Download" section under the "Income-Tax Forms" page and upload it to the portal for further filing. A new online process will start soon on the portal.

Conclusion

The process of filling Form 15 CA and 15 CB, if understood properly, is not as complicated and tedious as it seems. On top of that, the simplification in the process introduced by the Income Tax Department makes it easier for the taxpayer to follow the procedures. In addition, it also provides an option to withdraw Form 15 CA and 15 CB and gives an opportunity to withdraw these forms when required.