Importance of Form 15CA and Form 15CB

Form 15CA and Form 15CB have become crucial in today’s financial landscape. Professionals are often required to issue Form 15CB daily, while Form 15CA is generated on behalf of clients. Form 15CA serves as a declaration by the remitter, facilitating the collection of information regarding payments chargeable to tax in the hands of the non-resident recipient. This is the beginning of an effective information processing system that the Income Tax Department can use to independently track foreign remittances and their nature to determine tax liabilities.

The Role of Authorized Dealers and Banks

In modern times, the selection process for scrutiny cases has significantly reduced, leading to a lack of checks to ensure that taxable foreign remittances are made after the requisite tax deductions. To address this, banks and authorized dealers are now mandated to obtain Form 15CA and Form 15CB before processing any remittance. According to the revised Rule 37BB, banks have a duty to furnish the received Form 15CA to income tax authorities for any proceedings under the Income Tax Act. Furthermore, the recent FEMA guidelines compel banks to ascertain the tax liability for each remittance case.

Requirements for Form 15CA and Form 15CB

Step 1: Determine Necessity

According to Rule 37BB of the Income Tax Rules, Form 15CA and 15CB are not required for the following foreign remittance purposes:

No Form 15CA or 15CB is required for these 33 categories of foreign remittances.

Step 2: Determine the Part of Form 15CA to be Filled

Once it is established that Form 15CA and 15CB need to be filed, ascertain which part of Form 15CA should be completed by the assessee. As per the amended Rule 37BB:

• Use Part A of Form 15CA if the payment amount does not exceed ₹5,00,000 during the financial year.
• For larger payments, complete Part B after obtaining a certificate from the Assessing Officer under section 197, or an order under section 195.
• Complete Part C after obtaining a certificate in Form 15CB from a qualified accountant.
• If the payment is not chargeable under the provisions of the Act, fill out Part D of Form 15CA.

Step 3: Gather Required Information from the Client

A. Details of Remitter

• Name
• Address
• PAN
• Principal Place of Business
• Email Address and Phone Number
• Status (Firm/Company/Other)

B. Details of Remittee

• Name and Status
• Address
• Country of Remittee
• Principal Place of Business

C. Details of the Remittance

• Country to Which Remittance is Made
• Currency of Remittance
• Amount in Indian Currency
• Proposed Date of Remittance
• Nature of Remittance as per Agreement (Invoice Copy Required)

D. Bank Details of the Remitter

• Name of the Bank
• Branch Name
• BSR Code

E. Additional Information

• Father’s Name of the Signing Person
• Designation of the Signing Person

F. Required Documentary Evidence

• Form 10F duly filled by the Authorized Person of the Remittee.
• Tax Residency Certificate from the Remittee.
• Certificate confirming no Permanent Establishment in India (Mandatory for business income exempt under DTAA).