Introduction For Non-Resident Indians (NRIs) looking to transfer their own funds from India to an overseas account, understanding the requirements for Forms 15CA and 15CB is crucial. While these forms are commonly associated with tax compliance, their necessity for transferring personal funds may vary. This guide explains the purpose of these forms, when they are required, and how to ensure a smooth transfer process.
Understanding Form 15CA & 15CB When a resident transfers money to a non-resident, the transaction generally falls under the Liberalised Remittance Scheme (LRS). However, when an NRI transfers their own funds abroad, it is typically done under the $1 million scheme.
Forms 15CA and 15CB are key components in tracking such transactions:
- Form 15CA: An online declaration submitted to the Income Tax Department by the remitter. This form confirms that applicable taxes have been deducted before the transfer.
- Form 15CB: A certificate issued by a Chartered Accountant (CA) that verifies the nature of the remittance and ensures tax compliance.
Are Form 15CA & 15CB Required for Own Funds Transfer? When NRIs transfer their own tax-paid funds from an NRO account to an NRE or overseas account, Form 15CB is generally not mandatory. However, banks may still request both forms as part of their internal procedures.
Key points to consider:
- If the remittance falls under the exempted list of transactions, only Form 15CA (Part A or D) may be required, or no form at all.
- No Form 15CB is required if the transfer amount is below ₹5 lakh in a financial year.
Despite these rules, banks may still request Form 15CB for verification. Therefore, checking with the bank beforehand is recommended.
Process for Filing Form 15CA & 15CB If Form 15CA and 15CB are required, follow these steps:
- Obtain Form 15CB: Engage a Chartered Accountant to issue Form 15CB, if required. The CA will verify details such as the nature of the remittance, applicable taxes, and tax law compliance.
- File Form 15CA: After obtaining Form 15CB, fill out Form 15CA on the Income Tax e-filing portal.
- Submit to the Bank: Provide the completed forms along with other supporting documents as requested by the bank. The bank will process the remittance after verifying the details.
Key Points to Remember To ensure a smooth transfer process:
- Check your source of funds – Only tax-paid and legally earned money should be transferred.
- Coordinate with your bank – Compliance procedures may vary across banks.
- Ensure proper documentation – Maintain records of tax filings, bank statements, and proof of the source of funds.
- Consult a tax expert – If unsure, seeking guidance from a Chartered Accountant can simplify the process.
Conclusion
Understanding the requirements for Forms 15CA and 15CB is essential for NRIs transferring funds from India. While these forms may not always be mandatory for transferring personal funds, banks often require them for internal compliance. Staying informed, maintaining proper documentation, and consulting a tax professional can help ensure a hassle-free transfer process.
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Disclaimer: Aim of this article is to give basic knowledge about the topic to people who are not in touch with Indian tax norms. When anybody is dealing with these kinds of cases practically, he shall consider all relevant provisions of all applicable Laws like FEMA/Income Tax/RBI /Companies Act etc.
