Form15CA CB Certificates

Why Form 15CA?

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. This is starting of an effective Information Processing System which may be utilized by the Income tax Department to independently track the foreign remittances and their nature to determine tax liability. Authorised Dealers/ Banks are now becoming more vigilant in ensuring that such Forms are received by them before remittance is effected since now as per revised Rule 37BB a duty is casted on them to furnish Form 15CA received from remitter, to an income-tax authority for the purposes of any proceedings under the Income-tax Act.

Why Form 15CB?

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.

Revised Rules

The income tax department has revised the rules relating to preparation & submission of Form 15CA and Form 15CB (see old rules here).Revised rules are effective 1^st April 2016.The significant changes are as follows –

• Form 15CA and 15CB will be NOT be required to be furnished by an individual for remittance which do not requiring RBI approval

• List of payments of specified nature mentioned in Rule 37 BB which do not require submission of Forms 15CA and 15CB has been expanded from 28 to 33 including payments for imports.
• Form No. 15CB will only be required for payments made to non-residents which are taxable and the payment exceeds Rs. 5 lakh.

Who required and when?

A person responsible for making a payment to a non-resident or to a foreign company has to provide the following details –

When payment made is Rs 5 lakhs or less

For such payments information is required in Part A of Form 15CA

When payment made exceeds Rs 5 lakhs

• A certificate from Assessing Officer under Section 197
• An order from Assessing Officer under section 195(2) or 195(3)
• Part B of Form 15CA has to be provided
• Certificate in Form 15CB from an accountant
• Part C of Form 15CA

When the payment made is not chargeable to tax under income tax act

• Part D of Form 15CA
• In the following cases no submission of information is required
  • 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 the list below: