REMITTANCE OF MONEY OUTSIDE INDIA- ROLE OF FORM 15CA AND 15CB

Form 15CA and 15CB
 

When an individual or company transfers funds from an Indian bank account to the foreign bank account in foreign country, it is called as foreign remittance. For remitting money outside India, besides other mandatory documents, bankers often ask for the copies of form 15CA and 15CB.

 Form 15CA is an online declaration made by the remitter of money stating that tax has been deducted from any such payment made to person in other country. The purpose of form 15CA is that before remittance of money, if any tax is liable to be deducted, same has been deducted.

 Form 15CB is CA certificate issued online by a Practicing Chartered Accountant. The purpose of form 15CB is to ensure that taxes have been properly computed taking into consideration the provisions of the Income tax Act and the provisions of the Double Taxation Avoidance Agreement.



 Money is permitted to be remitted outside India by the AD Banker when following conditions are fulfilled:

 

a)      The source of remittable amount is genuine

b)      Applicable taxes has been deducted on such payment

c)      The remitter has submitted to the banker copies of form 15CA and 15CB which has been uploaded online.

 Various purposes for which money may be remitted outside India:

 

a)      Tuition fees or educational expenses

b)      Living expenses abroad

c)      Medical expenses abroad

d)      Sale proceeds of Indian immovable property

e)      Purchasing of assets abroad

f)       Payment of dividend to foreign shareholders

g)      Foreign travel

h)      Gift to relatives abroad

i)        Any other purpose

 

Aforesaid foreign remittances are regulated by FEMA regulations

 For individuals making foreign remittances, RBI has come out with detailed guidelines which come under liberalized remittance scheme i.e LRS of the FEMA. As per such scheme,

 1)      Maximum permissible amount to be remitted by an individual in a financial year is USD 2.5 Lac. For making remittance in excess of the same, permission of RBI is required.

 2)      There can be any number of transactions which can be taken in 1 year however; aforesaid limit shall be kept in mind.

 3)      The sender must provide PAN details during each transfer.

 4)      Only banks and category II AD Bankers are allowed to remit money outside India

 5)      Purpose of such remittance and genuineness of such transactions need to be established.

 6)      KYC documents and other additional documents as per purpose of remittance need to be provided. Example in case of foreign studies, letter from foreign university will be required

 

It may be further be noted that filing of form 15CA and 15CB is not mandatory in all the cases. The CBDT has come out with Rule 37BB providing the list of transactions on which there is no requirement for online filing of form 15CA and 15CB. Also, no need for any manual submission of such forms with the bankers.

 

Every year, lacs of foreign remittance transactions undertake in India and accordingly, it is very essential to have knowledge of FEMA and RBI regulations relating to same.

 

It is advisable to take guidance of the experts in the subject in order to conclude such transactions in a hassle free manner.

 

Location: India

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