NRI OCI NRO A/C MONEY REPATRIATION - FORM 15CA 15CB SERVICES CHARTERED ACCOUNTANT
globalisation, cross border financial transactions are common including payment/remittance of money from India to Abroad. In case of NRIs, Other Non-residents, general transactions are repatriation from NRO account to NRE/Foreign Bank Account. Under the banking system, these transactions are regulated through certain Income tax and RBI provisions. Under Income Tax Provisions, generally, Payment or Remittance of Money happens in following two categories:
- One is – When NRIs (or PIOs / OCIs) remit money from NRO Bank Account to NRE Account or Foreign Account.
- Second category is – When a payment is made from India by Indian Residents to Non-Residents outside India (i.e. NRIs, Foreign Companies, OCIs, PIOs, Foreign Citizens Abroad etc) e.g. royalty, consultancy fee, business payments etc i.e. where payment contain any income element.
In above both cases, as per the procedures, there is a requirement of submission of Form 15CA and Form 15CB. Both are Income Tax Forms under section 195 of Income Tax Act.
In the first category (Remittance/Repatriation by NRI), TDS provisions does not apply as the money is remitted by NRI from their NRO bank account to NRE/Foreign bank. However, bank requires the Form 15CA & 15CB from NRI/PIO/OCI. Hence, in this case, Form 15CA & 15CB is mandatory requirement of banker. Hence, NRI (or PIO/OCI) approaches a Chartered Accountant for preparation of Form 15CA & 15CB .
Further, in the second category (Payment to Non-Residents), where payment (containing an income component) is made to Non-Resident, there is a requirement of withholding & deposition of TDS and to submit Form 15CA & 15CB. Again, CA services are required for preparation and submission of Form 15CA and 15CB. However, this procedure is responsibility of Indian Resident remitting money to Non-residents.
REMITTANCE / REPATRIATION OF MONEY BY NRI / OCI – FROM NRO ACCOUNT TO NRE/FOREIGN ACCOUNT:
Remittance of money from India (Indian NRO Bank Account) to NRE/Foreign Bank is a common & frequent requirement of NRIs, OCIs, PIOs. Their money is held in their Indian NRO Bank Accounts, which they wish to remit to NRE/Foreign Bank as per their need.
- Generally, NRIs, PIOs, OCIs accumulate their money in their NRO account in India, in saving or fixed deposit account. They accumulate this money out of the funds they remit from their foreign account. In many cases, NRIs earn this money on their investments in India (rental or interest income).
- NRIs, PIOs, OCIs also receive money in their NRO account from the sale of their property or mutual funds or in India.
- In many cases, NRIs, OCIs received money as Gift from their close relatives in India.
- In all scenarios, when money accumulates in Indian NRO Bank Account, Since, NRIs/OCIs need money abroad, they wish to remit NRO account money from India to Foreign account abroad.
- NRIs also plan to remit funds from NRO to NRE account to earn similar return without the exposure of Indian Taxation. Also, remittance from NRE account to Foreign account can be done anytime very conveniently.
- Now, when NRIs wish to remit their NRO account money to NRE account or Foreign Account, the banker in India demand certain paper formalities. Of these requisite documents, two main documents are Form 15CAForm 15CB.
- Here, TDS is not applicable, as this is remittance by NRIs from their own account to own account.
PAYMENT TO NON-RESIDENTS AND TDS U/S 195 OF INCOME TAX ACT:
As Per Section 195 of the Income Tax Act, TDS is applicable on any payment (containing income element), which is being made to Non-Residents (i.e. NRIs, Foreign Companies, OCIs, PIOs, Foreign Citizens Abroad etc). Hence, in other words, if someone is making payment to Non-Resident then he has to withhold tax on the payment he is making to a Non-Resident (i.e. NRIs, Foreign Companies, OCIs, PIOs, Foreign Citizens Abroad etc). Other provisions of section 195 are:
- Here, it is important to understand that this provision is different from NRI remittance of money. Here, remitter of money is other person and recipient is other. Here TDS is applicable.
- Tax withholding (TDS) rate is as per rates in force. Hence, the TDS rate is maximum rate as per the provisions of act applicable on such nature of income e.g. if payment is for purchase of long term immovable property then TDS rate is @20% plus surcharge & cess.
- TDS rate is subject matter of any relief under the Double Tax Avoidance Agreement (DTAA) or special rate provided in the Income Tax Act e.g Fee for Technical Services or Interest Income. In many DTAAs the rate on these items are 10% or 15%.
- Form 15CB (a CA Certificate) and Form 15CA gets submit (online) for these payments.
- TDS rate can be lower rate or nil rate. For nil rate or lower rate TDS, the payer or payee can file an application (u/s 195 or u/s 197) with the Jurisdictional Assessing Officer (Juris AO). Once Juris AO allows TDS Exemption Certificate or Lower Rate TDS Certificate the payer makes payment after giving effect of TDS as per the certificate and makes the payment to Non-Resident (i.e. NRIs, Foreign Companies, OCIs, PIOs, Foreign Citizens Abroad etc).
Reserve Bank of India (RBI) Regulations for repatriation of money by Nri pio – NRI One Million dollar scheme
- RBI regulations allows NRIs PIOs to repatriate upto One Million US dollar (1,000,000 USD) per financial year.
- There is no requirement of RBI approval to repatriate money by NRIs or PIOs unto this amount.
- If any NRI or PIO wish to remit money more than this limit then there is a requirement to seek prior RBI approval.
- This limit is per person basis.
- This limit is per financial year basis. Hence, NRIs can remit money in each financial year unto One Million USD.
Basic Information Wrt Form 15CA and Form 15CB
- Form 15CB is a Chartered Accountant (CA) certificate, where the information about nature of income and its taxation is mentioned.
- Form 15CA is a declaration by the remitter, which is based on Form 15CB.
- Both the forms (Form 15CA and 15CB) are prepared online and submitted with the Income Tax Department.
- The CA verifies the source details of remittance and ensure that the taxes are duly paid in India, if any.
- After the verification process, the CA prepares the Form 15CB (which is an online process) with all requisite details. In this Form, CA submits various details as per the details given in next para.
- On the basis of 15CB itself, a Chartered Accountant prepares the Form 15CA as well and submits the same online.
- When the CA submits the two forms i.e. 15CB and 15CA, an acknowledgement generates, which is provided to the Banker for processing of remittance.
- Besides Form 15CB, CA also generate a Unique Document Identification Number (UDIN) on ICAI web portal as per the ICAI Regulations. Banks can verify the UDIN online.
Form 15CA and Form 15CB – Requisite For Form Preparation:
- Remitter Details – Remitter Name, Address etc.
- Beneficiary Details – Beneficiary Name, Address, Country, Currency etc
- Bank Details – Remitting bank details, branch details, BSR Code etc.
- Amount – Proposed amount of remittance in Indian Currency as well Foreign Currency
- Date of remittance – Proposed date of remittance of money
- Nature of remittance
- TDS details if applicable
- DTAA details if DTAA benefit applies
- RBI code details for remittance purpose etc
- Reasons of non-deduction of tax – Eg remittance by NRIs from their NRO account to NRE/Foreign Bank.
Time duration for filing of Form 15CA and Form 15CB and remittance of money by NRIs OCIs:
- It takes 1-3 days for verification procedure as well preparation & filing of Form 15CB and 15CA.
- Once the 15CA and 15CB is submitted, its acknowledgements can be provided to Bank (along with remittance requisition form).
- Banks, generally, process the remittance immediately after receipt of acknowledgements of Form 15CA and 15CB.