Any payment or any remittance is done to a Non-resident is subject to many rules and regulations. Initially, when an individual user to make payment or remittance to Non-Resident, he was bound to furnish a certificate in a standard format specified by RBI. The purpose behind collecting the taxes at the time of the remittance is to avoid a situation where it becomes difficult or impossible to collect the tax from the NRI later.
Now in order to check and track the transactions in a well- manner, re-filling of data in the certificates is introduced.
Section 195 of the Income tax act, 1961 makes it compulsory to deduct the Income-tax from payments made to Non-Resident. The person making payment/ remittance to non – resident holds the responsibility to furnish an undertaking (in form 15CA) attested by a Chartered Accountants Certificate in Form 15CB. So when a person has to make any payment or remit any money to non-resident, the bank will have to verify the payment of tax and act accordingly.
For the deduction of tax, there are certain tax slabs, formed for different specific amounts on which tax is levied and two Forms, Form 15CA, and Form 15CB for two different cases, which has to be submitted online duly filled.
The Form 15CA has to be furnished online by a person making any remittance of foreign nature to a non-resident. The Form 15CB regulates the tax deduction as per the income tax rules and also prohibits the double tax provision. The filing of Form 15CB requires an attestation from a chartered accountant.
In Form 15CB, we are required to mention information like details of the remittee, details of the remitter, nature of remittance including royalty, salary, commission etc, Tax Residency Certificate and Bank details of the remitter from the remitter in the case of DTAA (Double Taxation Avoidance Agreement).
Documents required for Form 15CA and 15 CB:-
Details of Remitter :
Remitter’s PAN Number
Principal Place of Business of the Remitter
E-Mail Address and Phone No. Of Remitter
Status of the Remitter (Firm/Company/Other)
Details of Remittee :
Name and Status of the Remittee
Address of the Remittee
Principal Place of Business
Country of the Remittee
Details of the Remittance :
Country to Which Remittance Is Made
Currency in Which Remittance Is Made
Amount of Remittance in Indian Currency
Proposed Date of Remittance
Nature of Remittance as Per Agreement (Invoice Copy to Be Asked From Client)