July 2024

Form 15CA and Form 15CB of Income Tax. These forms are required to ensure that the correct amount of tax is deducted and deposited to the government. Form 15CA is an online declaration you are required to submit before making the payment. Form 15CB is a certificate from a Practicing CA, Compliance, in itself, often gets people shivering in their boots, thanks to the inherent human tendency to panic whenever anything is submitted for approval or clearance from authorities who most often appear intimidating. However, this article is a humble attempt to put to rest those fears and ensure a smooth process of submission and compliance. the income tax department has relaxed the requirement of furnishing Form 15CA/15CB electronically on the new e-filing portal www.incometax.gov.in.  What is Form 15CA? Form 15CA is a form that is required to be filed with the Income tax Department if a resident makes any payment to a non-resident. The Payer require to furnish the details and information as per the provisions of the Income Tax Act. Form 15CA helps the IT department to track foreign remittances and their taxability. It also helps the non-resident to claim credit for the tax deducted in India. Form 15CA has to be submitted online on the e-filing portal of the IT Department. What is Form 15CB? Form 15CB is a certificate that verifies that the (TDS) tax deducted at source from the payment made to a non-resident is in accordance with the Income Tax Act and the Double Taxation Avoidance Agreement (DTAA). A Practicing chartered accountant issues it and contains the payment details, the TDS rate, the DTAA provisions, and the compliance with Section 195 of the Income Tax Act. Form 15CB is required to be filed before making any remittance to a non-resident. Applicability of Form 15CA and Form 15CB If the amount of remittance is not chargeable to tax, then no forms are required. If the remittance is covered under a specified exemption list, only Part D of Form 15CA must be submitted. Where remittance is less than Rs.5 lakh in a particular financial year – Only Form 15CA – Part A to be submitted. Where remittance exceeds Rs.5 lakh – Form 15CA – Part C and Form 15CB are to be submitted. Where remittance exceeds Rs.5 lakh and a certificate under Section 195(2)/195 (3)/197 of the Income Tax has been obtained – Form 15CA – Part B is to be submitted. How many parts of Form 15CA? Part AIf the remittance is chargeable to tax and its total is not more than ₹ 5 Lakh, then Part A of Form 15CA has to be filled. Part BIf the remittance exceeds ₹ 5 Lakh and a certificate has been obtained from the Assessing Officer under Section 197/195(2)/195 (3) of the Income Tax. Part CIf the remittance exceeds ₹ 5 Lakh and is taxable under Income Tax Act, and certificate in form 15CB has been obtained from a chartered accountant. Part DIf the remittance is covered under a specific exemption, Part D of Form 15CA has to be submitted. Procedure to File Form 15CA and 15CB Online Form 15CA Step-by-Step Process to File Form No.15CA – Part A, B and D (Online mode) Form No. 15CA is filed electronically on the Income Tax e-filing portal and is verified either using a digital signature or electronic verification code (EVC). Step 1: Log in to the income tax portal: www.incometax.gov.in Step 2: Before filing, you are Required to Add your Chartered Accountant  Select the ‘Authorised Partners’ tab, click on ‘My Chartered Accountant (CA) from the drop-down menu You will be directed to a page ‘My Chartered Accountant(s)’. Click on the ‘Add CA’ option You will then be prompted to add the ‘Membership Number of the CA’ Click on ‘Add’ and you will be required to give a ‘Confirmation’  A message displaying ‘Request for adding CA has been submitted successfully, it is pending for acceptance by the CA’ will appear Step 3: Process of E-filing Form No. 15CA 1. Log in to the E-filing portal and go to “E-file” > ‘Income tax Forms’ > ‘File Income Tax Forms’  2. You will be directed to the page ‘File Income Tax Forms’, click on ‘Others (Source of Income not relevant)’ and choose Form No. 15CA. Alternatively, you can also type Form No. 15CA in the search box and locate it 3. Now on the ‘Instructions’ page, click on ‘Let’s Get Started’ 4. On the page ‘Information for payment to Non-Resident’, Select ‘Mode of Submission’, and the FY.  5. From Part A, B and C, you are required to select the applicable part in Form No. 15CA. Let’s say, Part-A Part A is applicable where remittance is below Rs 5 lakh during a financial year. You need to enter details of the remitter (sender), remittee (recipient), and remittance (fund transfer details). There is no requirement for Form No. 15CB from a CA. Finally, you will be required to submit the verification Part-B  Part B is applicable when you have received assessing officer (AO) approval under Section 195(2), 195 (3) or 197.  In Part B as well, you are required to key in details related to remitter, remittee and remittance. The only difference is that you need to provide AO Order details as well. Also, there is no requirement for Form No. 15CB Part-C Part C is applicable in cases where the remittance or the aggregate of such remittance exceeds Rs 5 lakh during a financial year, and an accountant’s certificate in Form No. 15CB is required.  In Part C, you would be required to furnish details about the chartered accountant (CA) and related attachments. This is apart from the remittee and remittance details After filling in all the relevant details, you are required to click on ‘Assign to CA’ Once you click on ‘Yes’ to give your confirmation, a message will come up stating ‘Assigned to the CA successfully’ Go to the Dashboard and click on ‘Pending Actions’ You will be able to see Form No. 15CB, which

The balance of payments (BOP) is the method countries use to monitor all international monetary transactions in a specific period. The BOP is usually calculated every quarter and every calendar year. All trades conducted by both the private and public sectors are accounted for in the BOP to determine how much money is going in and out of a country. If a country has received money, this is known as a credit, and if a country has paid or given money, the transaction is counted as a debit. Theoretically, the BOP should be zero, meaning that assets (credits) and liabilities (debits) should balance, but in practice, this is rarely the case. Thus, the BOP can tell the observer if a country has a deficit or a surplus and from which part of the economy the discrepancies are stemming. Balance of Payment Balance Of Payment (BOP) is a statement that records all the monetary transactions made between residents of a country and the rest of the world during any given period. This statement includes all the transactions made by/to individuals, corporates and the government and helps in monitoring the flow of funds to develop the economy. When all the elements are correctly included in the BOP, it should be zero in a perfect scenario. This means the inflows and outflows of funds should balance out. However, this does not ideally happen in most cases.  A BOP statement of a country indicates whether the country has a surplus or a deficit of funds, i.e. when a country’s export is more than its import, its BOP is said to be in surplus. On the other hand, the BOP deficit indicates that its imports are more than its exports. Tracking the transactions under BOP is similar to the double-entry accounting system. All transactions will have a debit entry and a corresponding credit entry. Importance of Balance of Payment BOP statement of a nation reveals its financial and economic status BOP statement can be set as an indicator to determine whether the country’s currency value is appreciating or depreciating BOP statement helps the Government to decide on fiscal and trade policies It provides crucial information to analyse and understand the economic dealings of a country with other countries How the Balance of Payments (BOP) Is Divided The BOP is divided into three main categories: Current account Capital account Financial account Within these three categories are subdivisions that account for a different type of international monetary transaction. As an example, the current account includes a goods and services account, a primary income account, and a secondary income account. The Current Account The current account is used to mark the inflow and outflow of goods and services into a country. Earnings on investments, both public and private, are also put into the current accountWithin the current account are credits and debits on the trade of merchandise, which includes goods such as raw materials and manufactured goods that are bought, sold, or given away, possibly in the form of aid. Services refer to receipts from tourism, transportation, engineering, business service fees, and royalties from patents and copyrights. Goods and services together make up a country’s balance of trade (BOT). The BOT is typically the biggest bulk of a country’s balance of payments, as it makes up total imports and exports. If a country has a BOT deficit, it imports more than it exports, and if it has a BOT surplus, it exports more than it imports. Receipts from income-generating assets such as stocks—in the form of dividends—are also recorded in the current account. The last component of the current account is unilateral transfers. These are credits that are mostly workers’ remittances, which are salaries sent back into the home country of a national working abroad, as well as foreign aid that is directly received. The Capital Account The capital account is where all international capital transfers are recorded. This refers to the acquisition or disposal of nonfinancial assets—for example, a physical asset such as land—and non-produced assets, which are needed for production but have not been produced, such as a mine used for the extraction of diamonds. The capital account is broken down into the monetary flows branching from debt forgiveness, the transfer of goods, and financial assets by migrants leaving or entering a country, the transfer of ownership on fixed assets, the transfer of funds received to the sale or acquisition of fixed assets, gift and inheritance taxes, death levies, and, finally, uninsured damage to fixed assets. The Financial Account In the financial account, international monetary flows related to investment in business, real estate, bonds, and stocks are documented. Also included are government-owned assets, such as foreign reserves, gold, special drawing rights (SDRs) held with the International Monetary Fund (IMF), private assets held abroad, and direct foreign investment. Assets owned by foreigners, private and official, are also recorded in the financial account. Why is the Balance of Payment (BOP) vital for a country? A country’s BOP is vital for the following reasons: The BOP of a country reveals its financial and economic status. A BOP statement can be used to determine whether the country’s currency value is appreciating or depreciating. The BOP statement helps the government to decide on fiscal and trade policies. It provides important information to analyse and understand the economic dealings with other countries. FAQs What is the meaning of a deficit in the balance of payments? When autonomous foreign exchange payments exceed autonomous foreign exchange receipts, the balance of payments deficit is the difference. Autonomous transactions in foreign exchanges are those transactions that are independent of the state’s balance of payments and are undertaken for an individual’s own sake. What is the difference between the balance of trade and payments? Balance of trade is the difference between exports and imports of goods. Only the visible items are considered in the balance of trade. The exchange of services between countries is not considered. The current account of the balance of payment comprises exports and imports of goods, services and unilateral transfers like remittances, gifts, donations, etc. The net value of all these constitutes the balance of the current account. Thus, the balance of trade is