15CA, 15CB certificates

Certifications

Certifications in terms of International Business refers to those necessary forms that one needs to fill in order to carry out transactions such as remittance of funds to non-residents (Form 15CA & 15CB) or a certificate by Chartered Accountants for all the assets and liabilities of an enterprise (Net worth Certificates).

For services such as transfer pricing or certifications services, contact Starters’ CFO as we can help you with all sorts of your queries.

Sending money outside India is sometimes a daunting procedure for both foreign businesses and expatriates living in the country. There are various schemes and regulations that limit how much money can be remitted and for what purpose. Certifications help in doing this remittance.

15CA, 15CB certificates

15CA Certificate and 15CB Certificate are used to transfer funds to non residents. Finance Act, 2008 inserted a new sub section (6) to section 195 effective from April 1, 2008, which requires the person responsible for making payment to a non-resident to furnish information relating to such payments in forms to be prescribed. The Central Board of Direct Taxes (“CBDT”) has now, by notification No 30/2009 dated March 25, 2009, prescribed a new rule 37BB in the Income Tax Rules, 1962 (“the rules”) prescribing Form 15CA and Form 15CB to be filed in relation to remittances to non-residents under section 195(6) of the Income Tax Act, 1961 (“the Act”). This new rule is effective from July 1, 2009 and shall apply to all remittances being made after July 1, 2009.

One also needs to take care of Net-worth certificates important for any organization.

Process of15CA & CB Certificate

The process that will have to be followed, before any remittance can be made, is as under—

  • Step 1: Obtain a certificate from a Chartered Accountant in Form No 15CB
  • Step 2: Furnish the information in Form No15CA (15CA Certificate online)
  • Step 3: Electronically upload Form 15CA on the designated website
  • Step 4: Take Print out of Form 15CA and file a signed copy
  • Step 5: Remit money to the Non Resident

Please note that all the above steps have to be undertaken before remittance of money to the non-resident.

Amended Provisions to import payments to non residents

In 2013 CBDT had notified certain 39 items of payments for which Form 15CA & 15CB was not required, however, it was then reduced to 28 items by a later Notification which had omitted 11 items of payments from the specified list. It includes

  • Advance payment against imports and
  • Payment towards a imports-settlement of invoice. It is pertinent to note that at that point of time Form 15CA & 15CB are required to be submitted only for those payments which are chargeable to tax in India and therefore the removal of these two items were not a matter of debate as it exists today due to amended provisions of Sec. 195(6).