03 February 2016
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.
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.
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.
Perusal of Form 15CB makes it clear that there is no condition or exemption to obtain such certificate when the remittance is not chargeable to tax. In fact this Form 15CB is the Tax Determination Certificate where the Issuer CA examines the remittance having regard to chargeability provisions under Section 5 and 9 of Income tax Act along with provisions of Double tax Avoidance Agreements with the Recipient’s Residence Country. Therefore in my opinion, it is advisable to obtain 15CB even in cases where 15CA is not mandated. Though there is no penal provision prescribed in the Act if such Certificates in Form 15CB and Declaration in Form 15CA are not obtained, but it is in the interest of Assessee to have a tax determination in Form 15CB from a CA, since Non-resident taxation involves various complex issues and the consequences of Non deduction are severe.
Prima facie, if the remittance is not subject to tax in India Form 15 CA need not be submitted, even though banks insist on it. That is because as per the provisions of Rule 37 BB only foreign remittances of the 28 items enumerated in the table are exempt from providing certificates in Form 15 CA and Form 15 CB.
However, it is advisable to obtain Form 15 CB from a Chartered Accountant, so that the remitter faces no problems from tax authorities at a future date. The same may also be submitted to the bank certifying that the remittance is not subject to tax in India.
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