Tools for Remittance of Payment to a Foreign Company and Non Resident

Making foreign remittances and the taxability on such payments have always been a keen issue for discussion. The government through its various notifications, circulars, and notices, has made it clear to the taxpayers that if they are making any remittances or payments to foreign companies or non-residents, then they must file in Form 15CA and 15CB for providing the government accurate proof regarding paid taxes on such transfers.

Form 15CA

The remitter making the remittance has to submit Form 15CA by filling in all the parts provided in it based on the amount and taxability on the remittance made. These parts are as follows-

  1. Part A: It is to be filed in case the remittances made by the taxpayer are chargeable with taxes as per the provisions of the Income Tax Act, 1961. It is filed when the aggregate of the payments or remittances does not exceed Rs.5 Lakh in a particular financial year.
  2. Part B: The Part-B of the Form 15CA is to be filled when the remittances made by the remitter is chargeable with taxes under the Act and aggregate of such payments does not exceed Rs.5 Lakh along with an ordered certificate under Section 195(2), Section 195(3) and Section 197 of the Income Tax Act, 1961 that has been issued by an assessing officer.
  3. Part C: This part is to be filed in the case when the remittances are taxable under the act and the aggregate of such remittances exceeds Rs.5 Lakh in a particular financial year. Here, in this case, the Form 15CB which a certificate from the Chartered Accountant is to be obtained as well.
  4. Part D: This part of Form 15CA is to be filled in when the remittances made by the remitter are not taxable under any provisions of the Income Tax Act, 1961.

 

Pre-requisites of the Registration process for Filing Form 15CB:

For filing Form 15CB the remitter must complete certain pre-requisites. One such condition is to add a Chartered Accountant or CA to their respective registered accounts on the income tax portal. For adding the CA, the following steps must be followed by the taxpayer-

  1. Step 1: Log in to the e-Filing Portal on the income tax website. Go to “My Account” and click on “Add CA”.
  2. Step 2: The Membership Number of the CA must be entered.
  3. Step 3: Select Form 15CB in the Form Name column. Click “Submit”.

 

Once the CA is added to the taxpayer’s online account, then the CA can file Form 15CB on behalf of the taxpayer. For Filing Form 15CA filing Form, 15CB is very important, therefore it must be handled by the professional. The Chartered Accountant should follow the below steps for filing Form 15CB-

  1. Step 1: In the e-filing account the Chartered Accountant must be a registered user. If they are not registered before, they can register themselves by clicking on the “Register Yourself” link on the homepage.
  2. Step 2: Under the Tax Professional Tab, select “Chartered Accountants”. Click “Continue”.
  3. Step 3: The CA should enter all the mandatory details and information. Complete the whole registration process for further filing of Form 15CA.
Author: Anil Agrawal
EZYBIZ India Consulting LLP, New Delhi. The firm is business and tax consultancy firm providing consultancy in Taxation, Regulatory, Transfer pricing, Valuation, Corporate funding and Business set up matters. He may be reached at 9899217778 or anil@ezybizindia.in.