Form 15CA, 15CB – Chartered Accountant (CA) Services India – NRI, OCI, PIOs Remittance of Money From NRO Indian Bank To Abroad, Payment To Non-Residents & TDS U/s 195, Tax Advisor In Delhi, Mumbai India
Under globalization, it is a common scenario that there are many financial transactions where payment/remittance of money happens from India to Abroad. Under Income Tax Provisions, Mainly, Payment or Remittance of Money happens in following two categories:
- One is – When NRIs (including PIOs and OCIs) remit their money from NRO Bank Account to NRE Account or Foreign Account.
- Second category is – When a payment is made from India to a Non-Resident (i.e. NRIs, Foreign Companies, OCIs, PIOs, Foreign Citizens Abroad etc), where payment contain any income element.
In above both cases, there is a requirement of submission of Form 15CA and Form 15CB. Both are Income Tax Forms under section 195 of Income Tax Act.
In the first category (Remittance by NRI), TDS provisions does not apply as the money is remitted by NRI from their NRO bank account to NRE/Foreign bank. However, bank requires the Form 15CA & 15CB from NRI/PIO/OCI. Here, in the first category, Form 15CA & 15CB is mandatory requirement of banker. Hence, NRI (or PIO/OCI) approaches a Chartered Accountant for preparation of Form 15CA & 15CB. Further, in the second category (Payment to Non-Residents), where payment (containing an income component) is made to Non-Resident, there is a requirement of withholding & deposition of TDS and to submit Form 15CA & 15CB.
REMITTANCE OF MONEY FROM NRO ACCOUNT TO NRE/FOREIGN ACCOUNT:
Remittance of money from India (Indian NRO Bank Account) to NRE/Foreign Bank is a common & frequent requirement of NRIs, OCIs, PIOs. Their money is held in their Indian NRO Bank Accounts, which they wish to remit to NRE/Foreign Bank as per their need.
- Generally, NRIs, PIOs, OCIs accumulate their money in their NRO account in India, in saving or fixed deposit account. They accumulate this money out of the funds they remit from their foreign account. In many cases, NRIs earn this money on their investments in India (rental or interest income).
- NRIs, PIOs, OCIs also receive money in their NRO account from the sale of their property or mutual funds or in India.
- Since, they need money abroad, they wish to remit NRO account money from India to Foreign account abroad.
- NRIs also plan to remit funds from NRO to NRE account to earn similar return without the exposure of Indian Taxation. Also, remittance from NRE account to Foreign account can be done anytime very conveniently.
- Now, when NRIs wish to remit their NRO account money to NRE account or Foreign Account, the banker in India demand certain paper formalities. Of these requisite documents, two main documents are Form 15CA and Form 15CB.
- Here, TDS is not applicable, as this is remittance by NRIs from their own account to own account.
PAYMENT TO NON-RESIDENTS AND TDS U/S 195 OF INCOME TAX ACT:
As Per Section 195 of the Income Tax Act, TDS is applicable on any payment (containing income element), which is being made to Non-Residents (i.e. NRIs, Foreign Companies, OCIs, PIOs, Foreign Citizens Abroad etc). Hence, in other words, if someone is making payment to Non-Resident then he has to withhold tax on the payment he is making to a Non-Resident (i.e. NRIs, Foreign Companies, OCIs, PIOs, Foreign Citizens Abroad etc). Other provisions of section 195 are:
- Here, it is important to understand that this provision is different from NRI remittance of money. Here, remitter of money is other person and recipient is other. Here TDS is applicable.
- Tax withholding (TDS) rate is as per rates in force. Hence, the TDS rate is maximum rate as per the provisions of act applicable on such nature of income e.g. if payment is for purchase of long term immovable property then TDS rate is @20% plus surcharge & cess.
- TDS rate is subject matter of any relief under the Double Tax Avoidance Agreement (DTAA) or special rate provided in the Income Tax Act e.g Fee for Technical Services or Interest Income. In many DTAAs the rate on these items are 10% or 15%.
- Form 15CB (a CA Certificate) and Form 15CA gets submit (online) for these payments.
- TDS rate can be lower rate or nil rate. For nil rate or lower rate TDS, the payer or payee can file an application (u/s 195 or u/s 197) with the Jurisdictional Assessing Officer (Juris AO). Once Juris AO allows TDS Exemption Certificate or Lower Rate TDS Certificate the payer makes payment after giving effect of TDS as per the certificate and makes the payment to Non-Resident (i.e. NRIs, Foreign Companies, OCIs, PIOs, Foreign Citizens Abroad etc).
Reserve Bank of India (RBI) Regulations for repatriation of money by Nri pio
- RBI regulations allows NRIs PIOs to repatriate upto One Million US dollar (1,000,000 USD) per financial year.
- There is no requirement of RBI approval to repatriate money by NRIs or PIOs unto this amount.
- If any NRI or PIO wish to remit money more than this limit then there is a requirement to seek prior RBI approval.
- This limit is per person basis.
- This limit is per financial year basis. Hence, NRIs can remit money in each financial year unto One Million USD.
Basic Information Wrt Form 15CA and Form 15CB
- Form 15CB is a Chartered Accountant (CA) certificate, where the information about nature of income and its taxation is mentioned.
- Form 15CA is a declaration by the remitter, which is based on Form 15CB.
- Both the forms (Form 15CA and 15CB) are prepared online and submitted with the Income Tax Department.
- The CA verifies the source details of remittance and ensure that the taxes are duly paid in India, if any.
- After the verification process, the CA prepares the Form 15CB (which is an online process) with all requisite details. In this Form, CA submits various details as per the details given in next para.
- On the basis of 15CB itself, a Chartered Accountant prepares the Form 15CA as well and submits the same online.
- When the CA submits the two forms i.e. 15CB and 15CA, an acknowledgement generates, which is provided to the Banker for processing of remittance.
- Besides Form 15CB, CA also generate a Unique Document Identification Number (UDIN) on ICAI web portal as per the ICAI Regulations.
Form 15CA and Form 15CB – Requisite For Form Preparation:
- Remitter Details – Remitter Name, Address etc.
- Beneficiary Details – Beneficiary Name, Address, Country, Currency etc
- Bank Details – Remitting bank details, branch details, BSR Code etc.
- Amount – Proposed amount of remittance in Indian Currency as well Foreign Currency
- Date of remittance – Proposed date of remittance of money
- Nature of remittance
- TDS details if applicable
- DTAA details if DTAA benefit applies
- RBI code details for remittance purpose etc
- Reasons of non-deduction of tax – Eg remittance by NRIs from their NRO account to NRE/Foreign Bank.
NRIs, OCIs, PIOs, Foreign Citizens – Requirement of Various Services In India
- Who is Non-Resident As Per Income Tax and RBI Rules
- CA Services In India In Relation To Non-Residents (NRIs, OCIs, PIOs, Foreign Citizens)
- Non-Resident (NRI, Foreign Citizens) Income Tax Return In India
- What are the Deductions, Reliefs and Exemptions, Which NRI, Foreign Citizens Can Be Claim In Indian ITR
- Property Sale Tax Income Tax Rules & Implications In India For Non-Residents (NRIs, Foreign Citizen) – How To Tax Plan That
- Income Tax Rules For TDS Exemption or Lower Rate TDS Certificate For NRIs, PIOs, Others (Form 13)
- What is PAN-AADHAAR Linking Rule In India. How It is Impact Non-Residents (NRI, Foreign Citizens)
- Seafarer/Mariner Income Tax Rules In India
- RBI, Tax Rules and Regulations For Non-Residents (NRIs, Foreign Citizens) For Property Buying In India
- Non-Resident (NRI, Foreign Citizen) Support Services In India For Property Purchase, Sale, Management etc
- Recently Migrated Indian Citizens (New NRIs) Rules – Needful Actions Under Tax, RBI Regulations etc
- Indian Budget 2019 – Rules For NRIs, Foreign Citizens
- Budget 2020 Rules For Non-Resident Residential Status In India- Affecting NRIs, PIOs, Indian Citizens
- Non-Resident ITR General Transactions In India (NRI, Foreign Citizen)
- Why Non-Resident Should File ITR In India (NRI, Foreign Citizens)
- Late Filing or Not Filing ITR Penalty Rules in India
- Consequences of Non-Filing of ITR in India
General FAQs – Form 15CA 15CB – NRIs, Foreign Companies, OCIs, Residents, Indian Companies, PIOs etc
Q: What are the FEMA and Income Tax Rules, Regulations in India in relation to Remittance of money by NRIs or PIOs from their NRO Account to NRE / Foreign Bank Account? What are foreign money transfer rules for NRIs, PIOs?
Ans: In India, NRIs or PIOs need to comply two laws before remitting money from Indian NRO account to NRE account or Foreign Account. Firstly, NRIs need to comply RBI Exchange Control Regulations, which allow NRIs or PIOs to repatriate upto One Million USD Per Financial Year. Secondly, as per the Income Tax Provisions and bank requirement, NRI need to Submit Form 15CA and 15CB with the Income Tax Department. For the form 15CA and Form 15CB, NRIs has to seek services of a Chartered Accountant Firm.
Q: Why Form 15CA and 15CB is required for NRIs for remitting Funds from NRO Account to their Foreign Bank Account? What are Non-Resident Income Tax Rules for Outward India Remittance of Money?
Ans: Form 15CA and 15CB is a requirement of Income Tax Laws. As per Income Tax Act, Section 195, when there is a payment to a Non-Resident of taxable income then remitter has to submit Form 15CA and 15CB with the Tax Authorities. In case of an NRI (or PIO), who remits fund from their NRO Bank Account in India to Foreign Bank Account (or even NRE Bank Account), the banks require the Form 15CA and Form 15CB. Though, as per the Income Tax Law, in such transactions (remittance of money by NRIs from Indian Bank Account to Foreign Bank Account), the provisions are not straightway applicable, however, the bank require the compliance of Form to keep a full proof check that no remittance is made from India without compliance of taxes.
Q: What are the Chartered Accountant (CA) Requirements in relation to completion of Form 15CA and 15CB for NRI transactions? What are the documents and records required by the CA in this regard?
Ans: In relation to NRI Transactions, Chartered Accountant verifies payment of due taxes in relation to remittance amount. In this regard, CA generally requires past few years records such as copy of ITR, 26AS, NRO & NRE Bank Statements etc.
Q: What are Form 15CA and Form 15CB? How to submit the Form 15CA and Form 15CB?
Ans: Form 15CB is a Chartered Accountant Certificate in a prescribed format of Income Tax Deptt. Form 15CA is replica of Form 15CB wrt information. Both the Forms are to submit online on the Income Tax Department Portal (www.incometaxindiaefiling.gov.in). To submit the Forms on the Income Tax Portal, assessee needs to create a registration idon the Income Tax Portal.
Q: What is RBI One Million Dollar Scheme of NRIs PIOs? What is RBI Rule or Guideline For Outward Remittance of Money By NRIs and PIOs?
Ans: One Million Dollar (1,000,000 USD) scheme is RBI Regulation, where NRIs or PIOs are allowed to repatriate abroad upto one million USD per financial year from their NRO bank account in India. There is no RBI approval required if NRIs wish to remit abroad any amount within this limit in a financial year. Here it is important to know that this one million dollar amount is per person basis and per FY basis. In next year again the same amount is allowed for remittance to NRI without any prior RBI Approval.
Q: What are the consequences if NRI does no comply with Form 15CA and Form 15CB? Whether remittance of money can be done without Form 15CA and 15CB?
Ans: Any remittance of money from India to outside India needs bank services. Without Bank services, money cannot be moved outside India. Form 15CA & 15CB is a mandatory requirement of all the banks for remittance of money by NRIs. Without Form 15CA & 15CB, bank will not process the remittance of money from NRO account.
Q: What are the Income Tax related compliances an NRI need to check besides Form 15CA and Form 15CB?
Ans: NRI or PIO must check/comply following besides Form 15CA and 15CB:
- Clarity of Source in relation to money under remittance process.
- Maintenance of all the Records in relation to Source of money.
- Computation of Taxes on the same and payment of that before remittance.
- Filing of Income Tax Return by due date (this may happen after remittance of money also).
- Seek proper advisory of some Tax Consultant or Chartered Accountant to check the compliance of laws.
Q: Whether NRI or PIO need to present in India to remit the funds and filing the Form 15CA and Form 15CB?
Ans: No. Now, banking facilities are very convenient. Any NRI or PIO, sitting in foreign country (e.g. USA, UK, Singapore etc), can remit the funds from their bank account in India. Banks provide multi services to their NRI customers to keep the transactions very easy and fast. Further, for submitting of Form 15CA and 15CB, NRIs need not to come to India. They can contact a CA for this, who will prepare and submit these forms. Information in this regard, for preparation of these forms, is exchanged via email. Forms are submitted online through Income Tax Account of NRIs (which is created online). There is no need of signature etc on any physical form. After submission of form online, acknowledgement is generated. NRI can provide that acknowledgment to its banker via email. If needed, CA firm can also send hard copy of these forms to the banker. Hence, NRI need not to come to India in this regard.
S Lohia & Associates – A Chartered Accountant firm, Tax advisors, non-resident tax expert – special team for Services to NRIs, Expats, Foreign Citizens Matters
We, S Lohia & Associates, are a Chartered Accountant and Tax Advisory Firm in India, keeping offices and associates across India and also abroad. Our service team include a separate team to service its Non-Resident clients i.e. NRIs, Foreign Citizens (Indian origin as well foreign origin) for their Tax Matters, Foreign Exchange Regulations (RBI Laws). Some of our service ingredients:
- Experienced and dedicated Team for Non-Resident Tax and Regulatory Matters
- One Contact Person Service for all matter in relation to Non-Resident client
- Served many hundreds of matters of Non-Resident clients
- Our techniques and guidance plug the mistakes & errors and avoid future litigation
- Efficient & Effective Service Team
- Time Saving By Minimum Time Duration To Complete The Assignments
- Various Support Services To Its Non-Resident Clients e.g. Representative Services, Address Services, Liaison Service etc
- Having offices/access to all major cities in India for Tax, Regulatory and other Matters.
- We do on routine basis Form 15CB and 15CA services to various Non-Residents. Our team help & advise NRIs PIOs in smooth & fast remittance of money. We advise and assist NRIs PIOs in computing & payment of taxes in India, if any.
- We also advise some tricks and techniques for fast processing of outward remittance e.g. selection of bank account, parallel action plan on various processes.