Existing provisions of section 195(6) of the Income Tax Act, 1961 (the Act) mandate that for any payment to a non-resident chargeable to tax in India, the remitter is required to furnish Form 15CA along with the certificate from a Chartered Accountant in Form 15CB. However, Authorised Dealers have been insisting for Forms 15CB and 15CA for almost all types of payments, whether chargeable to tax or not.
Recently, the Central Board of Direct Taxes has notified new rules amending the existing provisions of Rule 37BB of the Income Tax Rules, 1962 for furnishing information in Forms 15CA and 15CB. According to the notification, Form 15CB is to be furnished in specific cases only, depending on the quantum of payment and the nature of remittance made to the non-resident.
The amended rules would be effective from 1 October 2013.
Key features of the new rules
The information to be furnished in Form 15CA has been categorised as follows:
Part A
If the remittance does not exceed INR 50,000 and the aggregate of such amounts does not exceed INR 250,000 in a financial year, then information in Part A is required to be furnished.
Part B
If the remittance is not chargeable to tax in India and falls under the specified list of payments, then information in Part B would be required. The specified list inter alia includes the following:
- Indian investment abroad in equity capital (shares)
- Indian investment abroad in debt securities
- Indian investment abroad in branches and wholly owned subsidiaries
- Indian investment abroad in subsidiaries and associates
- Indian investment abroad in real estate
- Loans extended to non-residents
- Payment towards import settlement of invoice
- Remittance towards business travel
- Travel for medical treatment
- Travel for education (including fees, hostel expenses, etc.)
- Payments for life insurance premiums
- Payments for maintenance of offices abroad
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