Remittance of Funds abroad:
Previously the taxpayers were not allowed to make remittance of funds abroad without going through a proper and lengthy procedure. But now the Reserve Bank of India (RBI) has allowed them to remit amounts up to USD 1 million abroad in a particular financial year.
Procedure for Remittance of Funds:
For remittance of funds from an NRO account a person is required to file two forms respectively. These are Form 15CA and Form 15CB. Both the documents are filed to ensure that the taxes were already collected on the funds and amount before they were remitted abroad. This is done because it becomes really difficult to collect or recover the taxes on such funds at later stages or after remittance is made. Form 15 CA is filed as an undertaking by the Non-Resident Indian to remit some funds while Form 15CB is filed as a certificate of the information regarding the remitted funds by the Chartered Accountant More or less both Form 15CA and 15CB consist of the same kind of information. The process to file the forms and made the remittance of funds is as follows-
- Undertaking of the Information through submission of Form 15CA: This form is to be submitted by the taxpayer through online mode on the Tax Information Network. It consists of the remitter’s information such as his/ her name, NRIs address, Permanent Account Number, the details of the account and bank overseas where remittances of funds have been made and the complete details of the accountant certifying the same in Form 15 CB. When a person submits this form online after duly filling in the information, he/ she then receives an acknowledgement. The remitter needs to print the same, sign it and submit it to the bank along with Form 15CB while making the remittance of funds.
- Issuing Chartered Accountant Certificate through submission of Form 15CB: The remitter is required to the mentioned certificate in this form to certify that he/ she has paid all the due taxes on the funds to be remitted abroad from a Chartered Accountant. The certificate specifically gives the details about the nature of the remittance of funds i.e. whether it is an interest, royalties, remittance of the dividends received in India or is any other income. Also, it becomes important to know that, does Form 15CB is required for payment of purchases to be filed by the remitter or not. In case the remitter is availing TDS at lower rates under the Double Taxation Avoidance Agreement (DTAA), then he/ she is required to furnish and submit the Tax Residency Certificate to the Chartered Accountant while filing the form.
Regulations related to Remittance of Funds:
The Reserve Bank of India (RBI) under its liberalization scheme has made remittance of funds from India to abroad easier for the Non-Resident Indians, over the decades. Now they are free to repatriate the balance in the NRE Accounts which means they do not require any kind of permission for remitting funds or amounts abroad. Though, the balances in NRO Accounts are cannot be freely patriated but RBI has allowed remittance of funds of up to 1 Million USD by the NRIs only if they fill the Form 15CA and 15CB with complete details and follow a proper procedure laid down by the authorities.