From June 1, 2015, any person making a payment to a non-resident, including an NRI transferring funds from NRO to NRE account would be required to obtain a certificate from a Chartered Accountant in form 15CB and file form 15CA to the income tax department.
On May 14, 2015, the President of India gave assent to the Finance Bill, 2015 as passed by the both Houses of Parliament, which substituted section 195(6) with effect from June 1, 2015 as under:
“The person responsible for paying to a non-resident (not being a company) or to a foreign company, any sum, whether or not chargeable under the provisions of this Act, shall furnish the information relating to payment of such sum, in such form and manner, as may be prescribed.”
This amendment brings clarity to the ongoing debate about whether 15CA/15CB is required for NRO to NRE transfer or for remittance outside of India of any non-taxable funds like long term capital gain on equity shares, PPF account, inheritance, etc.
While the CBDT notification 67/2013 required Form 15CA/15CB only for the taxable transfers, the bank personnel were asking for the Forms even for such non-taxable transfers creating a lot of confusion among NRI fraternity. This amendment made the procedural requirement very clear.
- The revised rules are applicable from June 1, 2015, so you still have 15 days to transfer non-taxable funds without Form 15CB/15CA. Of course, convincing the bank won’t be easy.
- For the nature of the payments included in the “Specified List”, Form 15CB/15CA may not be required.
- For payment that does not exceed Rs. 50,000 or aggregate of payment does not exceed Rs. 250,000 in a financial year, Only Form 15CA Part A to be furnished.
- For any payment other than #3 above, updated CA Certificate in Form 15CB to be obtained and Part B of the Form 15CA to be furnished to the Income Tax department.
Please review my other blogs on NRO to NRE transfers and information required for 15CB/15CA.
From June 1, 2015, Form 15CA/15CB would be required for transfer of funds from NRO to NRE or for making any payment to an NRI.