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Recent Articles Of GST
Applicability of Form 15CA / CB for LRS Transactions
A. Introduction:
Remittance made outside India requires reporting to the income tax department through various forms relevant to the transaction. Furnishing information to the department is mandatory to comply with the law. Relief from compliance is also provided under the Income Tax Act for specific transactions. In this article, we discuss about the cases where Form 15CA/CB is required to be filed when the remittance is made under LRS.
B. Liberalised Remittance Scheme (LRS) :
Liberalised Remittance Scheme, allows all resident individuals, including minors, to freely remit up to USD 2,50,000 per financial year (April – March) for any permissible current or capital account transaction or a combination of both. The Scheme is not available to corporates, partnership firms, HUF, Trusts etc.
One can remit money within the LRS limit of $2,50,000 per financial year, for the following:
a. Private visits to any country (except Nepal and Bhutan).
b. Gift or donation.
c. Going abroad for employment.
d. Emigration.
e. Maintenance of close relatives abroad.
f. Travel for business, or attending conferences, or specialised training, or meeting medical expenses, or check-up abroad, or for accompanying as an attendant to a patient going abroad for medical treatment.
Remittance beyond the prescribed limit requires prior approval of RBI.
C. Form 15CA and CB:
• Every person who is making payment to a non-resident (not being a Company), or to a Foreign Company is required to deduct tax if the sum is chargeable to Income Tax and these details are required to be furnished in Form 15CA.
• Form 15CA is required to be furnished before making such remittance by the person responsible for making the remittance. There are two modes to submit the form one is online and another is offline. In certain cases, certificate in Form 15CB is also required to upload with Form 15CA.
Two types of transactions where Form 15CA and CB is not required to be filed are:
1. Not taxable Remittance is made by an individual and does not require prior approval of RBI.
2. Not taxable Remittance is of the nature specified under the relevant purposes code as per RBI as per the list given under rule 37BB(3).
D. Transaction under LRS required to file Form 15CA/CB:
Transactions which do not fulfill the conditions of non-filing Form 15CA & CB as mentioned above. In other words following transactions are required to file Form 15CA
• Remittance taxable under the income tax act.
• Non-taxable but does not fulfill the above condition for not-filing Form 15CA.
E. Transaction under LRS not required to file Form 15CA and CB:
As per the Rule 37BB(3) of the income tax rules, remittance which is not chargeable to tax and where the approval of RBI is not required, Form 15CA is not required to be filed.
So following transactions under LRS up to the prescribed limit is not required to file Form 15CA.
Remittance within the LRS limit of $2,50,000 per financial year, one can remit money for the following:
a. Private visits to any country (except Nepal and Bhutan).
b. Gift or donation.
c. Going abroad for employment.
d. Emigration.
e. Maintenance of close relatives abroad.
f. Travel for business, or attending conferences, or specialised training, or meeting medical expenses, or check-ups abroad, or for accompanying as an attendant to a patient going abroad for a medical treatment.
F. Conclusion
It can be concluded that the liability to furnishing Form 15CA & CB not depends on the transaction falling under the LRS or not. Even though the transactions falls or fulfils the LRS conditions payer is required to file Form 15CA. one should deal with both the provisions separately.
