15CA & 15CB Certification
In India, 15CA & 15CB Certification refer to the declaration of remittances made to a non-resident.
15CA is a declaration made by the remitter and is required for all remittances other than those that are exempt. The form is used to furnish details of the remittance and the TDS (Tax Deducted at Source) deducted on such payments.
15CB is a certificate issued by a Chartered Accountant and is required in case the remittance is taxable. The certificate is issued after conducting a tax assessment on the remittance and verifying whether the details of the remittance mentioned in 15CA are correct.
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Who is eligible for 15CA & 15CB certification ?
Any person who is responsible for making a payment to a non-resident or is responsible for remitting income any abroad is required to provide Form For 15CA & 15CB Certification.
However, there are certain exceptions in case of remittance for which Form 15CA and/or 15CB may not be required. For example, remittance that doesn’t exceed INR 5 lakhs in a financial year doesn’t require a Form 15CA or 15CB.
It’s important to note that non-compliance with these requirements can attract severe penalties and interest.
Why 15CA & 15CB certification is required ?
15CA and 15CB forms are required to be submitted for the following transactions:
- – All payments that attract TDS, as per the Income Tax Act, 1961
- – All made payments to non-residents, irrespective of whether TDS applies or not
- – All payments made for foreign travel or for purchasing foreign currency
- – All remittances that are chargeable to tax, not being traffic in goods, and the amount of such remittances
- – All remittances that are taxable under the Income Tax Act, 1961, and the DTAA (Double Taxation Avoidance Agreement)
- – All remittances made on account of interest payments, royalties, and FTS (Fees for Technical Services)
What are the benefits of 15CA & 15CB certification?
Submitting Form 15CA and 15CB provides the following benefits:
- Compliance with Indian Tax Laws: Submitting Form 15CA and 15CB ensures compliance with Indian tax laws by providing all necessary information regarding the payment made to a non-resident and the applicable tax deducted at source.
- Avoidance of Double Taxation: Form 15CA and 15CB are essential to claim a tax credit in the home country of the non-resident. This helps to avoid double taxation of income.
- Avoidance of Penalties: Non-compliance with Form 15CA and 15CB requirements can attract significant monetary penalties, including a penalty of up to INR 1 lakh under Section 271-I of the Income Tax Act.
- Smooth Processing of Payments: Submission of Form 15CA and 15CB avoids delay in the processing of payments made to the non-resident and ensures that the transaction is completed smoothly.
It’s important to note that the benefits of submitting Form 15CA and 15CB depend on the specific nature of the transaction and compliance requirements.
What are the required documents for 15CA & 15CB certification?
the following documents are generally required to submit Form For 15CA & 15CB Certification,
Documents
- – PAN Card: Permanent Account Number (PAN) card of the remitter.
- – Form 15C: Declaration form to be electronically filled and signed on the website of income tax department.
- – Form 15CB: A certificate issued by a Chartered Accountant after verifying the details mentioned in Form 15CA
- – Invoice/Purchase Bill: Invoice copy or purchase bill for the payment made to a non-resident.
- – Agreement/Contract :Copy of the agreement or contract executed between the remitter and the non-resident.
- – TDS Certificate: Certificate of TDS deduction in case TDS is applicable.
What is the process of 15CA and 15CB certification ?
Determine the nature of transaction – identify if the transaction requires Form 15CA and 15CB, based on the nature of the payment and applicable tax law.
Obtain the necessary details – gather all relevant details such as payment amount, remitter details, non-resident details, etc., required to fill the Form 15CA and 15CB.
Submit Forms 15CA and 15CB to Bank – provide Forms 15CA and 15CB to the Authorized Dealer Banks that you are transacting with. The bank will verify the details and accept the forms.
What is the difference between 15CA and 15CB certification ?
The main difference between the 15CA and 15CB forms is that the 15CA form is a declaration of remitter (individual or company sending money abroad) and it has to be submitted online. The form is used to certify that taxes have been paid on the funds that are being sent abroad. On the other hand, the 15CB form is a certificate of an accountant, which is required when the amount of remittance exceeds INR 5,00,000. This document establishes that the amount being remitted is not chargeable to tax and that the correct amount of tax has been paid or provided for.
What is the penalty for not filling form 15CA and 15CB?
According to the Income Tax Act of India, the penalty for not filing 15CA and 15CB forms can be levied in the form of monetary charges or prosecution. If forms are not filed, the penalty can range from a minimum of INR 10,000 to a maximum of INR 1,00,000 depending upon the length of the delay period. Additionally, under section 276B of the Income Tax Act, non-filing or late filing of these forms can attract a penalty of imprisonment up to 7 years with or without fines. It is always recommended to submit these forms on time to avoid any kind of penalty or legal trouble.
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