When a person is remitting some funds to a non-resident there is a requirement of submission of a format prescribed by the RBI. The sole purpose of this form is to ensure that on such remittance tax is deducted at source as at a later stage it shall be a cumbersome exercise to get the tax amount deducted from the non-resident concern to whom the funds are remitted.
So, the process called for the filing of such information in prescribed certificates.
Tax deduction on payments made to a non-resident
The payments made to a non-resident by a resident Indian attract tax implication under the Section 195 of the Income Tax Act , 1961 and in respect of the same the remitter needs to provide an undertaking in Form 15CA. While Form 15CB is a CA or Chartered Accountants certificate that needs to accompany Form 15CB.
CA typically verifies and certifies all such details, including TDS rates, payment amount, TDS deduction as per Section 195, if any DTAA treat is applicable etc.
Payments where approval from the RBI and submission in 15CA is not required are:
These payments are stated in Rule 37BB and does not need compliances and reporting via the submission of 15CA and 15CB. Below is the list of all such remittances:
|Sl. No.||Nature of Payment|
|1||Indian investment abroad - in equity capital (shares)|
|2||Indian investment abroad - in debt securities|
|3||Indian investment abroad- in branches and wholly owned subsidiaries|
|4||Indian investment abroad - in subsidiaries and associates|
|5||Indian investment abroad - in real estate|
|6||Loans extended to Non-Residents|
|7||Advance payment against imports|
|8||Payment towards imports- settlement of invoice|
|9||Imports by diplomatic missions|
|11||Imports below Rs.5,00,000- (For use by ECD offices)|
|12||Payment- for operating expenses of Indian shipping companies operating abroad.|
|13||Operating expenses of Indian Airlines companies operating abroad|
|14||Booking of passages abroad -Airlines companies|
|15||Remittance towards business travel.|
|16||Travel under basic travel quota (BTQ)|
|17||Travel for pilgrimage|
|18||Travel for medical treatment|
|19||Travel for education (including fees, hostel expenses etc.)|
|21||Construction of projects abroad by Indian companies including import of goods at project site|
|22||Freight insurance - relating to import and export of goods|
|23||Payments for maintenance of offices abroad|
|24||Maintenance of Indian embassies abroad|
|25||Remittances by foreign embassies in India|
|26||Remittance by non-residents towards family maintenance and savings|
|27||Remittance towards personal gifts and donations|
|28||Remittance towards donations to religious and charitable institutions abroad|
|29||Remittance towards grants and donations to other Governments and charitable institutions established by the Governments.|
|30||Contributions or donations by the Government to international institutions|
|31||Remittance towards payment or refund of taxes.|
|32||Refunds or rebates or reduction in invoice value on account of exports|
|33||Payments by residents for international bidding.|
Quantum of tax payable or deducted varies from case to case or transaction to transaction basis
Importantly, for such remittance, the tax rate depends on the transaction type say if a rent is being paid to an NRI then 30 percent tax needs to be deducted at source.
Requirement for filing of 15CA and 15CB
-From the remitter
1 Remitter name
2. Remitter address
4. Place of Business
5. Mobile number and e-mail
6. Status of the remitter i.e. a firm, individual or other
7. Digital signature of the remitter for submission of Form 15CA digitally.
1. Remitee detail
4. Principal business place
In respect of the remittance the details need a mention are:
1. Country where the remittance is made
2. Amount of remittance that need specification in Indian currency
3. Proposed date of remittance
Income tax e-filing not functional between June 1-June 6:
Notably as the income tax e-filing portal is being revamped to become more customer friendly all of the e-filing and tax related services on the government portal shall be not available from June 1-June 6, 2021. So, the Income tax department has notified that if anyone wishes to make remittance during the black-out period from June 1 to June 6, 2021, one may kindly submit and download their forms by midnight of 31st May, 2021 to avoid any inconvenience.