Form 15CA and 15CB are crucial documents under the Income Tax Act for foreign remittance compliance. 15CA and 15CB act only when the taxpayer has paid to a non-resident or a foreign entity. Form 15CA and Form 15CB focus on verifying whether the tax for such a payment was made. The forms 15CA CB apply to 28 different types of foreign remittances and are crucial compliance documents, especially for businesses.
Let us understand the forms 15CA and 15CB, their applicability, composition, e-filing process and more.
What is 15CA and 15CB?
Let us understand these forms one at a time.
Form 15CA Income Tax
15CA form is the remitter’s declaration for taxable payments made to non-resident recipients. This is a payment accumulating form for the Income Tax Department’s (ITD’s) Information Processing System to determine liable taxes based on the nature of remittances. Therefore, under 15CA, all foreign payments or remittances are to be disclosed by the remitter.
Form 15CB Income Tax
Unlike Form 15CA, which is a declaration, the 15CB form is a certificate that is issued by a Chartered Accountant (CA). The purpose of this form is to ensure that the Double Taxation Avoidance Agreement (DTAA) and the Income Tax Act provisions are compiled for deducting taxes on specific payments. These specified payments are non-resident remittances.
Form 15CB Income Tax details include the following:
- Details and nature of non-resident payments
- Whether the Section 195 of the Income Tax Act is compiled with or not
- Tax Deduction at Source (TDS) rate
- DTAA compliance confirmation
What is Form 15CA and CB applicability?
The following are the applicable use cases of 15CA and 15 CB:
- If the payment or remittance amount is not required to be taxed, then Form 15CA and Form 15CB are not required.
- 15CA Part D is the only part of 15CA to be submitted if the remittances are a part of the specified list of exemptions.
- For remittances less than ₹5 lacs in a financial year, only Form 15 CA Part A is to be submitted.
- For more than ₹5 lacs remittance in a financial year, taxpayers must submit Form 15CA Part C and Form 15CB.
- For more than ₹5 lacs remittances in a financial year, a Section 195(2)/195 (3)/197 certificate must be obtained along with Form 15CA Part B for submission.
What is Form 15CA composition?
Form 15 CA has a four parts division. These are Part 1, Part 2, Part 3 and Part 4. Each of these divisions serves different compliance requirements.
- Part A of Form 15CA should be filled for any remittance below ₹5 lacs in a financial year, regardless of whether it is taxable.
- Part B of Form 15CA must be filled out to obtain a Section 195(2)/195 (3)/197 certificate from the assessing officer (AO).
- Part C of Form 15CA applies to remittances with a chargeable TDS and remittances individually or in aggregate more than ₹5 lacs in a financial year.
- Part D must be filed when the non-resident remittances are not chargeable to any tax.
How to file Form 15CA and 15CB?
Taxpayers can follow these steps to file Form 15CA and Form 15CB:
- Visit the Income Tax Department (ITD) portal and log in using your unique credentials.
- Select the ‘Authorised Partner’ and add details about your Chartered accountant (CA).
For Filing Form 15CA
- In the e-File tab, choose ‘Income Tax Returns’ and then ‘File Income Tax Forms’.
- Select ‘Others (Source of Income Not-Relevant)’ and then Form 15CA.
- After clicking ‘Let’s Get Started’ on the ‘Instructions’ page, select ‘Information for Payment to Non-Resident’.
- Select the applicable part of Form 15CA.
- E-Verify using EVC or DSC.
For Filing Form 15CB
- In the e-File tab, click on the ‘Upload Form’ button.
- Enter details like the taxpayer’s PAN and CA’s PAN.
- Select Form Name as ‘Form 15CB, and Form Type as ‘Original’.
- Upload the XML file that was generated through ‘Utility’.
- Click on Submit and wait for the ‘Success’ page.
You can now view your form under the ‘Worklist’ section by clicking the ‘For Your Information’ button on your e-File dashboard.
Conclusion
It is crucial for the government to keep an eye on foreign remittances. Form 15CA and Form 15CB are vital statement documents and certificates that ensure non-resident payment compliance.