Form 15CA

Any payments made by a resident to a non-resident has to be reported under the Income Tax Act. The idea behind deduction of the taxes at source and their subsequent reporting is to ensure that taxes are collected on time. Form 15CA is a declaration made by the person remitting the money wherein he states that he has deducted the tax from any payments so made to the non-resident.

Form 15CB

Form 15CB, however, is not a declaration, but a certificate issued by a Chartered Accountant ensuring that the provisions of the Double Taxation Avoidance Agreement and the Income Tax Act have been complied with in respect of tax deductions while making the payments. It includes the following:

• Details and nature of payment made to a Non Resident.
• Compliance with Section 195 of the Income Tax Act.
• Rate of TDS deducted.
• Applicability of the Double Taxation Avoidance Agreement.

Applicability of Form 15CA and Form 15CB

• If the amount of remittance is not chargeable to tax, then no forms are required.
• If the remittance is covered under a specified exemption list, then only Part D of the Form 15CA is to be submitted.
• Where remittance is less than Rs. 5 lakh in a particular financial year – Only Form 15CA – Part A to be submitted.
• Where remittance exceeds Rs. 5 lakh – Form 15CA – Part C and Form 15CB to be submitted.
• Where remittance exceeds Rs. 5 lakhs and a certificate under Section 195(2)/195 (3)/197 of the Income Tax has been obtained – Form 15CA – Part B to be submitted.