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Form 15CB is to be filled if more than Rs15 lakh is paid to NRIs

LiveMint logoLiveMint 25-09-2017 Archit Gupta

I am an NRI but have a house in Gurgaon that I am putting on rent. I have been informed that the tenant needs to fill forms called Form 15CA and Form 15CB. What are these about and how are they to be used? 

—Supreet Kaur

A person making a remittance (a payment) to a non-resident or a foreign company has to submit Form 15CA. This form is submitted online to the income tax department. Where payment to be made exceeds Rs5 lakh in a year and is taxable in India, a certificate from a chartered accountant in Form 15CB is required before uploading Form 15CA online. In Form 15CB, a chartered accountant certifies details of the payment, rate of tax deducted at source (TDS) and TDS deduction as per section 195 of the income-tax Act, if any Double Tax Avoidance Agreement (DTAA) is applicable. It will also have other details of the nature and purpose of the remittance. Banks require these certificates before they make any remittance to a non-resident. This helps the income tax department keep a watch on foreign payments and tax to be paid on them.

List of payments mentioned in Rule 37BB do not require submission of form 15CA and 15CB. However, rental payments made to an NRI are not part of this list.

How do FATCA rules apply to NRIs? 

—B. Ramdass

FATCA or Foreign Account Tax Compliance Act is enacted in the US. It is aimed at capturing unreported financial accounts and transactions of US persons held or undertaken outside the US. The US has entered into agreements with governments of other countries where FATCA requires that non-US financial institutions must report financial accounts held by US persons on a yearly basis to their local tax authorities. Tax authorities in these countries can then share this information with the Internal Revenue Service (IRS).

FATCA requires that all non-US financial institutions obtain a self-certification from its account holders so as to establish their tax residence. The institutions must report details of account holders if they are a specified US persons. Where the financial institution has not been able to obtain self-certification, FATCA requires that the account be closed and reported. Rule 114F to Rule 114H have been inserted in India’s income-tax Act, and lay down the actions that have to be taken by financial institutions in India regarding reporting of financial accounts and assets held by specified US persons in India.

If you are a non-resident Indian (NRI) and a citizen of the US or a US specified person, you may receive a request for self-certification of your accounts or other financial assets held in India. You must report your financial accounts and assets held by you in India to tax authorities in the US even if tax on these has been paid by you in India.

I had started a PPF account in 2003. It is set to mature soon. As an NRI, will the maturity amount from the PPF account be taxed? Also, if I move the money to a bank account, will the interest earned on it attract tax?  

—S. Tripathi

Withdrawals made upon maturity from a PPF account are not taxable in India. However, since you are an NRI, it is likely you are a tax resident of another country and these receipts may have to be offered to tax in that country.

Since you are an NRI, this money can be moved to a non-resident ordinary (NRO) account in India. Interest earned on an NRO account is taxable in India.

Archit Gupta is founder and chief executive officer of ClearTax. 

Queries and views at mintmoney@livemint.com

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