15CA/CB PROCEDURE : UNDERSTANDING FORM 15CA/CB

15CA/CB PROCEDURE : UNDERSTANDING FORM 15CA/CB

Hi Friends,

Through this small article I would like to give a brief understanding as to how a professional can arrive on decision of which part of form 15CA to use and if form 15CB is required.

1. So First thing that we need to check is Is Payment to a NRI Chargeable to tax?

Simple Rule for checking this is, if the income of NRI accrues in India, then it will be chargeable to tax in India. We need to check our transaction as per Section 9 of Income Tax Act.

Then we also need to check if the income is exempt as per Section 10 of Income Tax Act.

Now if the payment to a NRI not Chargeable to tax we further need to check that, if Prior approval of RBI is required?

If the remittance is made by an individual and it does not require prior approval of Reserve Bank of India as per the provisions of section 5 of the Foreign Exchange Management Act, 1999 (42 of 1999) read with Schedule III to the Foreign Exchange (Current Account Transaction) Rules, 2000 then you don’t need to file form 15CA.

You May Also Refer : Filling 15CA in case of foreign remittance in Income Tax Act

If the remittance is of the nature specified below then you don’t need to file form 15CA: 

Sl. No.	Purpose code as per RBI	Nature of payment
(1)	(2)	(3)
1	S0001	Indian investment abroad – in equity capital (shares)
2	S0002	Indian investment abroad – in debt securities
3	S0003	Indian investment abroad – in branches and wholly owned subsidiaries
4	S0004	Indian investment abroad – in subsidiaries and associates
5	S0005	Indian investment abroad – in real estate
6	S0011	Loans extended to Non-Residents
7	S0101	Advance payment against imports
8	S0102	Payment towards imports – settlement of invoice
9	S0103	Imports by diplomatic missions
10	S0104	Intermediary trade
11	S0190	Imports below Rs.5,00,000 – (For use by ECD offices)
12	SO202	Payment for operating expenses of Indian shipping companies operating abroad
13	SO208	Operating expenses of Indian Airlines companies operating abroad
14	S0212	Booking of passages abroad – Airlines companies
15	S0301	Remittance towards business travel
16	S0302	Travel under basic travel quota (BTQ)
17	S0303	Travel for pilgrimage
18	S0304	Travel for medical treatment
19	S0305	Travel for education (including fees, hostel expenses etc.)
20	S0401	Postal services
21	S0501	Construction of projects abroad by Indian companies including import of goods at project site
22	S0602	Freight insurance – relating to import and export of goods
23	S1011	Payments for maintenance of offices abroad
24	S1201	Maintenance of Indian embassies abroad
25	S1202	Remittances by foreign embassies in India
26	S1301	Remittance by non-residents towards family maintenance and savings
27	S1302	Remittance towards personal gifts and donations
28	S1303	Remittance towards donations to religious and charitable institutions abroad
29	S1304	Remittance towards grants and donations to other Governments and charitable institutions established by the Governments
30	S1305	Contributions or donations by the Government to international institutions
31	S1306	Remittance towards payment or refund of taxes
32	S1501	Refunds or rebates or reduction in invoice value on account of exports
33	S1503	Payments by residents for international bidding.

Part D of Form 15CA will be filed if payment to a NRI not Chargeable to tax [Other than above specified payments]

2. Yes the Payment to a NRI is Chargeable to tax!

Rate of Tax : Rate as per Income tax or Rate as per DTAA whichever is more beneficial for the asessee will be applicable.

[Please note that for availing the beneficial tax rate, NO-PE and TRC should be available with the NRI]

Check if payment or aggregate of payments in FY< 5,00,000 ?

Yes : File Part A of Form 15 CA.

3. If payment or aggregate of payments in FY< 5,00,00

File Part B of Form 15CA if :

(I) a certificate from the Assessing Officer is obtained under section 197; or
(II) an order from the Assessing Officer is obtained under sub-section (2) or sub-section (3) of section 195

File Part C of Form 15CA along with CA Certificate in Form 15CB.

You May Also Like : Filing Form 15CA and 15CB : Process and Requirements

I have made a brief Chart that will help you in understanding the procedure:

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