According to Section 195 of the Income Tax Act of 1961, each individual is accountable for paying the full amount to a non-resident must deduct TDS from such amounts, and if the total is payable to income tax, withholding tax must be deducted, and forms 15CA and 15CB are the necessary declarations. The form 15CA must be submitted by anyone making a remittance (payment) to a non-resident or overseas organization. This form should be filled out and submitted online. After uploading the form 15CA online, a Certification from a Chartered Accountant in form 15CB may be required in exceptional circumstances.
In Form 15CA, the supplying of documentation for payment to a non-resident, who is not a corporation, or to a foreign company has been divided into four components:
The CA evaluates the remittance for chargeability restrictions under Sections 5 and 9 of the Income Tax Act, as well as regulations of Double Tax Avoidance Agreements, and provides a 15CB. A Chartered Accountant acknowledges the payment information, TDS percentage and subtraction as according to Section 195 of the Income Tax Act, if any DTAA is applicable, and other details concerning the scope and level of the remittance in form 15CB.
Prior to carrying out Part C of Form 15CA, you must first upload Form 15CB. The Acknowledgement Number of e-verified form 15CB should be confirmed to prefill the entries in Part C of form 15CA.
The primary goal was to recover taxes at the time of remittance since collecting taxes from Non-Residents at a later stage may be unfeasible. In order to efficiently oversee and trace transactions, it was proposed to implement e-filing of information in certificates.
The exclusion of income tax on the amount paid to non-residents is mandated by Section 195 of the Income Tax Act of 1961. An undertaking (in Form 15CA) and a Chartered Accountants Certificate (in Form 15CB) must be provided by the person delivering the remittance to a non-resident.
For remittances that do not require RBI authorization, individuals are not obliged to provide details on Form 15CA and 15CB. Rule 37BB mentions a list of payments that are exempt from complying and reporting through the lodging of Forms 15CA and 15CB.
The following are the types of remittances:
|4.||Remitter's Principal Place of Business|
|5.||Remitter's E-mail Address|
|6.||Remitter's Name; No.|
|7.||No. of Remitters Remitter Status (Firm/Company/Other)|
|For the submission of Form 15CA, the remitter's digital signature is required.
(As this Form must now be submitted electronically)
|1.||Remittee's Name and Status|
|3.||Remittee's Principal Place of Business|
|2.||Remittances are sent to a particular country|
|4.||Remittance Amount in Indian Currency|
|5.||Proposed Remittance Date|
|6.||As agreed upon, the nature of the remittance (Invoice Copy)|
|Remitter's Bank Details|
|1.||Remitter'S Name and Bank Information|
|2.||Name of Bank Branch|
|3.||BSR Code of Bank|
|Required Documents for DTAA Benefits|
|1.||The Remittee's (TRC) Tax Residency Certificate
(Tax Registration of the Country in which remittee is registered).
|2.||Form 10F, duly completed by the remittee's authorised person (Self Declaration).|
|3.||No statement of PE (Permanent Establishment). If the income is business-related, this is required.|