Form 15CB: A Quick Guide on CPA/CA Certification for Transferring Funds out of India

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Form 15CB: A Quick Guide on CPA/CA Certification for Transferring Funds out of India

 

Going by the Section 195 of The Income Tax Act of 1961, any payer remitting money to a non-resident citizen of India or a foreign company is required to submit Form 15CA. 

Additionally, in case of payments that exceed Rs. 5 lakh per year and fall under tax implications in India, a Chartered Accountant (CA) needs to issue a certificate in Form 15CB (only after this can Form 15CA be uploaded on the online portal of the Income Tax website.)

Many questions boggle the minds of NRI taxpayers regarding Form 15CB of income tax, also known as the Tax Determination Certificate. 

Here are some of the pressing questions that keep them awake:

1. Should I approach an Assessment Officer before transferring funds out of India? 
2. How would I know whether you need to file Form 15CB or not? 
3. What are the documents that I need to furnish along with Form 15CB

This article will give you a clear understanding of where to begin and what to do so that you remain tax compliant while making foreign remittances.

 

What is Form 15CB?

Form 15CB of income tax is a form that needs to be signed by a Chartered Accountant and goes on to become a Tax Determination Certificate. 

This certificate mentions all the details about TDS or Tax Deducted at Source, tax rates, tax relevance, and provisions of tax chargeable under Section 5 and Section 9 of the Income Tax Act.

Other than these, the DTAA or Double Tax Avoidance Agreement provisions are also mentioned if they are applicable. 

The form contains further details like the nature and the purpose of the money transfer. It is now mandatory for banks to have these certificates before making any foreign remittance. 

 

How to file Form 15CB?

Before filing Form 15CB, a taxpayer will need to add a Chartered Accountant, with valid details, to the Income Tax Department website. 

To add the CA, listed below are the steps that one must follow:

• Visit the Income Tax Department website.
• Log on to the e-form filing portal by filling in with accurate credentials.
• Click on the 'My Account' tab. A drop-down menu will appear, from which the 'Add CA' option needs to be selected.
• The Chartered Accountant's Membership Number is to be entered accurately.
• Select Form 15CB under the form name, add the Financial Year, and click on Submit. 

Once all the above-mentioned steps are completed, the Chartered Accountant will be successfully added and file Form 15CB on the taxpayer's behalf. 

Needless to mention that the Chartered Account will have to be a registered professional to be added to the e-filing portal. This appointment is to be made only once in every Financial Year.

 

Steps For A Chartered Accountant To File Form 15CB

The Chartered Accountant needs to follow the listed steps in order to file Form 15CB for income tax.

• Visit the Income Tax Department website.
• Log on to the e-form filing portal by filling in with accurate details.
• Go to the menu on the top of the page and click on the 'Downloads' tab.
• Clicking on the Forms Tab will help you download Excel or Java utility.
• Prepare the XML file by making use of the Excel or Java Utility.
• Go to the e-file tab and click on the Upload Form available on the drop-down menu.
• Enter the following details on the portal:

1. 15CB Income tax Form.
2. PAN details of the Assessing Officer.
3. TAN details of the Assessing Officer.
4. PAN details of the Chartered Accountant.

• Choose the Filing Type as Original and select the form name as Form 15CB. 
• Click on the Submit icon.

Once all these steps are completed, the CA or the taxpayer will receive a message that indicates successful submission of the form. A confirmation email will be sent to the person's registered email ID. 

 

Form 15CB: Requirement From Client

One of the most important documents while filing Form 15CB is the Digital Signature Certificate. 

Apart from that, below are a list of all the details that a client needs to furnish while filing Form 15CB.

 

Remitter Details

• Name of the remitter.
• Address of the remitter.
• The primary business address of the remitter.
• PAN details of the remitter.
• The Email address and contact details of the remitter.
• Status of the remitter (Individual/Firm/Company/Other).

 

Remittee Details

• Name and status of the Remittee.
• Address of the Remittee.
• The primary business address of the Remittee.
• Name of the country to which the remittance is being made.

 

Remittance Details

• Name of the country to which remittance is being made.
• Remittance Amount in INR.
• Name of the country from where remittance is being made.
• Nature of the remittance according to the agreement made. The client will have to provide a copy of the invoice as proof)
• Proposed date of remittance.

 

Remitter Bank Details

• Name of the bank of the remitter.
• Name of the branch of the bank.
• BSR Code of the bank.

 

Other Essential Details

• Signing person's designation.
• Name of the father of the signing person.

 

Essential Documents Required from the Client

• An accurately filled Income tax Form 10F. This is a Self-Declaration.
• Tax Residency Certificate from the Remittee OR Tax Registration of the country where the Remittee is officially registered.
• Certificate to prove that the Remittee does not own any permanent residence/establishment in India. This No PE declaration is necessary because, according to DTAA, if the income is obtained out of business, then it does not fall under tax implication if there is no permanent establishment in the country.

 

Importance Of Form 15CB

Banks require a remitter to submit Form 15CB before making any remittance to a foreign resident. This allows the income tax department the opportunity to keep an eye on foreign payments and the taxes that are payable to them. 

The e-filing of Form 15CB was made mandatory by Section 195 of the Income Tax, 1961 because it is easier to track the payments at a stage when the remittance is being made. 

At a later stage, it may not be possible to collect taxes from a Non-resident, especially after the payments are made and the transaction is done.

If an individual making foreign remittances to a non-resident or a foreign company fails to: 

1. Furnish Form 15CA or Form 15CB (as applicable).
2. Furnish adequate information or provide inaccurate information in Form 15CA and Form 15CB 
3.  Under Section 271-I of the Income Tax Act, the person is liable to pay the penalty. In such a situation, the defaulter may be directed by the Assessing Officer to pay INR 1 Lakhs as a penalty. 

The services of a Chartered Accountant are of paramount significance while filing Form 15CB. How well-versed they are with the filing process will decide how smoothly your remittance process and tax compliance are being handled. 

This is where Alfred Jordan plays a key role since one of the company's most noted services is to offer guidance and counseling for taxation purposes, especially in TDS, DTAA, foreign remittances, etc. 

To know more, write an email to contact@AlfredJordan.com or at +91 8370 76567.

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