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Compliances to be made in respect of foreign remittances often gets one’s pulse racing, gets one all jittery and shaky, cause the process involves not just regular money, but foreign money.
Compliance, in itself, often gets people shivering in their boots, thanks to the inherent human tendency to panic whenever anything is submitted for approval or clearance from authorities who most often appear intimidating. However, this article is a humble attempt to put to rest those fears and ensure a smooth process of submission and compliance.
Through a press release dated 14th June 2021, the income tax department has relaxed the requirement of furnishing Form 15CA/15CB electronically on the new e-filing portal www.incometax.gov.in. The taxpayers can submit the said forms in manual format to the authorised dealers till 30th June 2021.
Under the Income Tax Act, all payments made by a resident to a non-resident must be disclosed. The goal of tax deduction at source and subsequent reporting is to ensure that taxes are collected on time. Form 15CA is a declaration filed by the person remitting the money in which he states that any payments made to the non-resident have been taxed.
Form 15CB, however, is not a declaration, but a certificate issued by a Chartered Accountant ensuring that the provisions of the Double Taxation Avoidance Agreement and the Income Tax Act have been complied with in respect of tax deductions while making the payments. It includes the following:
The form is divided into four parts, to be filled based on the scenario that is prevalent at the time. The four parts are:
To be filled irrespective of whether taxable or not and the remittance or its aggregate does not exceed Rs. 5 lakh in a financial year.
To be filled when the Certificate under Section 195(2)/195 (3)/197 of the Income Tax Act has been obtained from the Assessing Officer.
To be filled when the remittance or its aggregate exceeds Rs. 5 lakh in a financial year and that remittance is chargeable to tax.
Is filled when as per the domestic laws, the remittance is not chargeable to tax.
Form No. 15CA is filed electronically on the Income Tax e-filing portal and is verified either using a digital signature or electronic verification code (EVC).
Once the e-Verification process is complete, a success message is displayed with a Transaction ID and Acknowledgement Number. You are required to keep a note of the Transaction ID and Acknowledgement Number. A confirmation message will be sent on your email ID and mobile number registered with the income tax e-filing portal
Part A and B (Taxpayer):
Form 15CB (Offline/Bulk Mode):
Appointing your CA:
Part A and B (CA):
The submission of forms such as these, in reality, aren’t as complicated and tedious as they are normally believed to be. Moreover, the option of withdrawing the form presents the opportunity to retract the form when necessary.
Yes, to prefill the details in Part-C of Form No. 15CA, the Acknowledgement Number of e-Verified Form No. 15CB should be verified.
Invoice, tax residency certificate (TRC), the agreement between the parties and Form No. 10F.
In case of contravention, a penalty of Rs 1 lakh can be imposed by the assessing officer (AO).
Any person not being a company, who is responsible for paying to a non-resident or a foreign company should furnish such information the required information Form 15CA.
The information in Form 15CA is not required to be furnished for the following transactions:
No, it is not compulsory to submit Form 15CB. Form 15CB is an event-based form that is to be filled only when the remittance amount exceeds Rs.5 lakh during a financial year and you are required to furnish an accountant certificate defined as per Section 288 of the Income Tax Act, 1961.
Form 15CB is submitted and accessed by a Chartered Accountant (CA) registered on the e-Filing portal. The taxpayer must assign Form 15CA to the CA in order to be able to certify the details in Form 15CB.
Yes, uploading of Form 15CB is compulsory prior to the filling of Part C of Form 15CA. The acknowledgement number of the e-verified Form 15CB should be verified for prefilling the details in Part C of Form 15CA.
The Form 15CB can only be e-verified using the Digital Signature Certificate (DSC). The DSC of the CA should be registered on the e-Filing portal. There is no prescribed time limit for submitting Form 15CB. But, it must be submitted before the remittance is made.
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