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Introduction: 

Forms 15CA and 15CB are very important in the dynamics of financial transactions, especially for businesses involved in international transactions. Recent research on these documents highlights the important role they play in ensuring compliance and facilitating communication. This comprehensive guide explores the intricacies of how they have been updated for Forms 15CA and 15CB, giving businesses the insight they need for effortless international financial activity.

Form 15CA and 15CB overview:

Form 15CA: 

Under the Income Tax Act, any income disclosed by a resident for a non-resident must be clearly disclosed. The purpose of tax deductions at source and subsequent reporting is to ensure timely collection of taxes. Form 15CA is a declaration by the submitting party, stating that tax has been properly applied to the payments made to non-residents.

Form 15CB:

However, Form 15CB works differently; It is not a declaration but a certificate issued by a Chartered Accountant. This certification provides assurance that the tax relief facilitated by it is in accordance with the provisions described in the Double Taxation Avoidance Treaty and Taxation of the Tax Code. Information pertaining to Form 15CB includes:

• Details and method of payment can be found in Form 15CB.
• The amount of TDS deduction is also shown in Form 15CB.
• Form 15CB also verifies compliance with the Double Taxation Avoidance Agreement.
• Form 15CB additionally ensures compliance with Section 195 of the Income Tax Act.

Applicability of Form 15CA and  15CB:

• If the remittance is tax-free, no paperwork is required.
• Submission of only Part D of Form 15CA is necessary if the remittance falls under a specified exemption list.
• 5 lakhs, both Form 15CA – Part C and Form 15CB must be submitted.
• If the remittance is below Rs. 5 lakh in a given financial year, only Form 15CA – Part A needs to be submitted.
• For remittances exceeding Rs. 5 lakh and where a certificate under Section 195(2)/195(3)/197 of the Income Tax has been obtained, Form 15CA – Part B is required for submission.

Parts of Form 15CA:

The form is divided into four parts, each of which should be filled out based on a situation. These are the four parts:

Part A:

To be fulfilled whether the remittance is taxable or not, unless the remittance or the aggregate amount exceeds Rs. 5 lakh in a financial year.

Part B:

To be filled when a Certificate under Section 195(2)/195(3)/197 of the Income Tax Act has been obtained from the Assessing Officer.

Part C:

To be completed when the remittance or its accumulation exceeds Rs. 5 lakh in a financial year is taxable.

Part D:

This section is completed when the remittance is not taxable under domestic law.

How to File Form 15CA & 15CB: 

Once submitters have a basic understanding of Forms 15CA and 15CB, they can follow these steps to submit the documents.

Form 15CA:

Step 1: Go to the official e-filing income tax portal.

Step 2: Login with your PAN details and password. New users must pre-register to access.

Step 3: Once logged in, go to the top navigation bar and select ‘e-file’ option. Select ‘Prepare and Submit Online Form (Other than ITR)’ from the drop-down menu.

Step 4: Select Form 15CA under the dropdown list for ‘Form Name’, then click ‘Continue’.

Step 5: A new page will appear, where you have to select the correct version of the form that matches the status of the sender.

Step 6: Fill in the required information based on the selected parts. The general information required is name, address, contact details, remittance amount and TDS details.

Step 7: If you do not want to send the form immediately, select ‘Save Draft’ and complete it later. Alternatively, when you are ready to complete the process, click ‘Submit’.

Step 8: After successful filing, a new page will display a ‘Success’ message.

Form 15CB

Step 1: Before filing Form 15CB, the taxpayer should include a Chartered Accountant (CA). To initiate this process, they have to visit the e-filing portal and go to the ‘My Account’ tab, where they can select ‘Add CA’.

Step 2: Enter the CA’s Membership Number and select Form Name as ‘15CB’. Then, click ‘Submit’.

Step 3: Once CA is added, Form 15CB can then be proceeded to the taxpayer. However, registration as a ‘Chartered Accountant’ is necessary for the CA to complete the e-filing process.

Step 4: Now, download the Form 15CB from the ‘Downloads’ page by submitting the .xml file.

Step 5: Select ‘Upload Form’ from the ‘e-file’ option on the main page. Then, enter the PAN of the assessee and CA and select the form name ‘15CB’, set the file type to ‘Original’.

Step 6: Generate the .xml file using the Utility and then proceed to upload it.

Step 7: Next, download the DSC Management Utility and install the Digital Signature File.

Step 8: Finally click on ‘Submit’ to complete the submission process.

How to File Form 15CA & 15CB offline: 

• Go to the e-filing portal and go to “e-File” > “Income Tax Forms” > “File Form 15CA”.
• Fill in the basic information, where the PAN/TAN will be automatically populated, including fiscal year, file type, and “offline/bulk” delivery method.
• Download the Form 15CA Offline Utility from the “Download” section on the Income Tax Forms page
• Prepare individual XML files for Remitter, Remittee, CA (only for Part-C), then zip all XML files. For Part-C, upload the Form 15CB XML issued by your CA, which can be downloaded from the View e-Filed Forms section.
• Upload the zipped file and proceed with the submission. Upon completion, you will receive a Token Number.
• To check the status of your submission, navigate to “e-File” > “View Form 15CA Offline/Bulk”. Here, you can verify if your XMLs were successful, indicated by an Acknowledgement Number generated, or if they failed, with reasons provided.
• If the submission fails, the reason for the failure will be indicated. Fix the issues and reload the XML with necessary validations and repair the data. In addition, you can download an export file that specifies the ARN number, status, and XML file name for failed submissions.

Form 15CB

• Log in to the e-Filing portal and navigate to “My Chartered Accountant(s)” under “Authorised Partners”.
• Add your CA by providing their membership number and assigning them Form 15CB. This needs to be done once per financial year.
• Go to the e-filing portal and go to “e-File” > “File Form 15CB”.
• Enter the basic details including user ID, PAN, select “Offline/Bulk” submission mode, and specify the financial year.
• Download Form 15CB Offline Utility from the “Download” section of the Income Tax Forms page.
• Prepare individual XML files for Remitter, Remittee, and CA, then compress them into a zip file.
• Upload the zipped file and upload your Digital Signature Certificate (DSC). Once completed, you will receive a Token Number.
• Check the status of your submission by going to “e-File” > “View Form 15CB Offline/Bulk” Here, you can check if your XMLs were successful, indicated by the generated Acknowledgment Number. 
•  if they fail, with reasons. If it fails, resolve the validations/data and resubmit the corrected XML. In addition, you can download a PDF of successful deliveries and an export file that lists the ARN number, status, and XML filename of failed deliveries.

Conclusion: 

During a financial year, many Indian taxpayers are required to make payments to non-residents. However, a significant number of taxpayers are unaware of the importance of tax deductions prior to making most of these payments. As per Rule 37BB of the Income Tax Rules, certain foreign remittances are taxable. Also, assessees or remitters are required to submit Form 15CA & 15CB to prove their tax deductions, failure to comply can result in heavy penalties so it is important for individuals to familiarize themselves with the Form 15CA & 15CB filing process by the steps described earlier.