COMMON MYTHS ABOUT FILING OF FORM 15CA AND 15CB

 FORM 15CA AND 15CB


Both FEMA regulations as well as Income Tax Act has prescribed rules to regulate any payments made overseas by any Resident. This is done in order to avoid money laundering and to ensure proper financial discipline relating to overseas payment.

 

At the time of remittance outside India by any Residents, besides other documents, bankers usually ask for the copies of form 15CA and 15CB.

 

Now, a question arises what exactly is form 15CA and 15CB?

 

Well the purpose of filing both the form 15CA and 15CB is to ensure that the taxes are collected before remittance of money outside India. Now, both the forms may be filed electronically which helps in monitoring as well as checking the effectiveness of remittances.

 



WHAT IS FORM 15CA?

 

In such form, the remitter of money makes a declaration that He has deducted the relevant taxes before remitting money to the Non Resident.

 

WHAT IS FORM 15CB?

 

In such form, which is sort of certificate by Chartered Accountant, He certifies that at the time of deduction of taxes, provisions of Income Tax Act and Double Taxation Avoidance Agreement i.e. DTAA has been properly complied with.

 

SOME COMMON MYTHS ABOUT FORM 15CA AND 15CB

 

1)      In all the cases of remittances outside India, form 15CA is required. This is incorrect due to the fact that Form 15CA is not required in 2 situations:

 

a)      In case the nature of payment falls under the exempted categories of payment specified under Rule 37BB of the Income tax Rules.

b)      It is not required by individuals who have been exempt to obtain RBI approval u/s 5 of the FEMA.

 

2)      Form 15CB is required in all the case of payment outside India. This is also incorrect since form 15CB is not required in following cases:

 

a.       In case the remittance is not taxable.

b.      In case the income is taxable in the country where remittee is Resident.

c.       In case where aggregate remittances during the financial year is less than Rs 5,00,000

 

3)      Another myth about filing of Form 15CA and 15CB is that once the forms are filed, the same cannot be revised or cancelled. This statement is partially correct since the forms once filed can only be revoked or withdrawn and cannot be revised. Further, for withdrawing form 15CB, it is important that Form 15CA was also filed; it means that form 15CB cannot be withdrawn if independently filed. Form 15CA can be withdrawn within 7 days from the date of submission.

Also, in case form 15CA has been withdrawn, automatically, form 15CB would also be withdrawn.

 

4)      It is not compulsory to file form 15CA and 15CB. This is another myth that filing of form 15CA and 15CB is not compulsory. On the contrary, it is compulsory to be filed and any noncompliance may lead to penalty upto Rs 1 lac u/s 271 of the Income Tax Act.

Thus, from above, it may be inferred that filing of form 15CA and 15CB are mandatory for the purpose of remittance outside India.

 

In case you require any information or clarification or any further assistance, you may contact EzyBiz India at www.ezybizindia.in or call at +919899217778

 

Location: India

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