What is form 15CA and 15CB?

About:

• According to Section 195 of Income Tax Act 1961, every person liable for making a payment to a non-resident shall deduct withholding tax from the payment made to a non-resident if such sum is chargeable to Income Tax and form 15CA and 15CB are the declarations for the same.
• A person making any remittance to a non-resident or a foreign company needs to submit Form 15CA online. This form is submitted online and in some cases, a certificate from Chartered Accountant in form 15CB is required after uploading the form 15CA online.
•  The furnishing of information for payment to a non-resident or a foreign company in form 15CA has been classified into four parts :
  1. PART A – Where remittance for the aggregate of such remittance does not exceed 5,00,000 rupees during the financial year.
  2. PART B – where an order/certificate u/s 195( 2)/195(3)/197 of Income Tax Act 1961, has been obtained from Assessing Officer.
  3. PART C – Where the remittance for the aggregate of such remittance exceeds 500,000 during the financial years.
  4. PART D – Where, under domestic law, the remittance is not chargeable to Tax.

 15CB is the tax determination certificate.

where a Chartered Accountant examines the remittance with regard to changeability provision under Section 5 and 9 of Income Tax Act, 1961.

Moreover in accordance with the provisions of double tax avoidance agreement (DTAA).

Form 15CB is a certificate certified by a  CA having details of payment, TDS rate and TDS deduction as per section 195 of Income Tax Act 

Uploading a form 15CA is mandatory for filing of PART C of form 15CA.

All details in PART C of form 15CA, an acknowledgement number of e-verified form 15CA should be verified. 

What is the need of 15CA and 15CB? 

Earlier, the person remitting to a non-resident was required to furnish a certificate in a specified format circulated by RBI.

Since it is not possible to collect the tax from the non-resident once the amount is remitted so the basic purpose for this form was to collect the taxes at the very stage of remittance.

Thus to monitor and track the transaction in an efficient manner, it was proposed to introduce e filing of information in these certificates. 

Section 195 of Income Tax Act 1961 the deduction of income tax for the payment made to a non-resident the person making the remittance to non-resident need to Foundation undertaking a company by an accountant certificate in form 15cb

What details and documents are required in Form 15CA and 15CB?

• Details of Remitter
  1. Name of Remitter
  2. PAN
  3. Address
  4. Place of business
  5. E-mail or Phone no.
  6. Status (Firm/company/other)
  7. Digital signature in Case of Form 15CA

• Details of Remittee
  1. Name of Remittee
  2. Status (Firm/company/other)
  3. Address
  4. Place of Business
  5. Country of the remitter

• Details of Remittance
  1. Currency
  2. Country to whom the remittance is made
  3. Proposed date of remittance
  4. Nature of remittance

• Bank Details of the remitter
  1. Name and bank of the remitter
  2. BSR Code
  3. Branch of Bank

• Document requirement for DTAA benefit
  1. No permanent establishment declaration. This is compulsory if the income is a business income
  2. Form 10F duly filled by the person authorized by the remitter
  3. Tax residence certificate

Taxability

According to section 5

• income received or deemed to received 
• income accrue and arise in India

According to Section 9

• Income is deemed to accrue and arise in India

Nature of Income and its taxability

Business Income- Taxable if the direct or indirect business connection in India or property or asset or source in India or transfer of a capital asset situated in India.

Capital Gain- Taxable if Shares/Property is situated in India or derives its value substantially from assets in India.

Salary Income- If earned in India.

Interest Income- If sourced in India (if the payer is Resident).

Royalties- If incurred for business in India irrespective of the residential status of the payer.

FTS- If incurred for business in India irrespective of the residential status of the payer.

DTAA

• Exempt from Tax
• Lower tax Rate