Provisions of section 195 and

form 15 CB (- Certification and

documentation)

CA N. C. Hegde
November 2015
1

Table of content
Particulars
Section 195 of the Income Tax Act
Chargeability to Income-tax
Payments to NR important aspects
Remedies available to the payer
Remedies available to the payee
Taxation of reimbursement overseas to non resident agent
Taxation of commission overseas to non resident agent
Key take aways
Clause by Clause 15 CB
2

Section 195 of the Income Tax Act

Taxation of international transactions

Scope of taxation in India - combination of residence

rule & source rule
(GVK Industries)(SC) ( 371 ITR 453)
4

Section 195 of the Income Tax Act

Provides for the deduction of tax at source on payments made to Non Residents

Features of Section 195:

Payer: Any person
Payee: A non-resident, not being a Company, or a Foreign Company.
Subject Matter: Deduction of Income-Tax at Source (TDS)
Payments: Interest or any other sum chargeable under the provisions of Income Tax
Act.
Rate of TDS: At the Rates in Force

Section 195 of the Income Tax Act

195(1)

payment by any person responsible / to a non resident

interest or any other sum chargeable to tax
payment or credit which ever is earlier / at rates in force
other than Salary and dividend referred in section 115-O

Application by Payer if it considers whole of sum is not income chargeable

195(2)

Application by Payee viz. Foreign Banking Company or non-resident having

branch in India for lower or Nil Withholding
195(3), (4) Powers to CBDT to issue notification
and (5)

195(6)

Furnishing of information in prescribed form viz. 15CA/15CB whether sum

chargeable or not chargeable under the Act

Comparative Analysis of section 195(2), 195(3)

and 197
Particulars

195(2)

195(3)

197

Application by

Payer

Payee

Payee

Purpose

To determine the
appropriate proportion of
sum chargeable

No deduction
of tax

No deduction/
deduction at
lower rate

No appeal

No appeal

Whether appealable?
Appeal u/s 248 denying
A revision petition under liability to deduct tax after
section 264 would lie
payment of tax
against such orders

Chargeability to income tax

Chargeability under the Income Tax Act

Under the Act

Section 5: Scope of Total

Income

Under DTAA
Royalty or Fees for
Technical Services
Business Income

Section 9: Income
Deemed to Accrue or Arise
in India

Independent Personal
Services
Other Income
9

Chargeability under the Income Tax Act

Section 5: Scope of Total Income - In case of Non Resident

Income received or deemed to be received in India; or
Income accrues or arises or deemed to accrue or arise to him in India.

Section 9: Income Deemed to Accrue or Arise in India.

An income is said to be deemed to accrue or arise in India if the same is accruing or

arising directly or indirectly, through
a business connection in India or
from any property in India or
from any asset or source of income in India or

the transfer of a capital asset in India* any other which derives its value from assets
in India.
It also includes any share or interest in a company or entity registered or incorporated
outside India which derives its value from assets in India.
Finance Act 2015 & DIT v. Copal Research Ltd., Mauritius
[2014] 49 taxmann.com 125 (Delhi HC )
10

Chargeability under the Income Tax Act

GE India Technology Centre Pvt. Ltd (327 ITR 456) SC

Where payment, made by resident to non-resident, was an amount not chargeable to
tax in India, no tax is deductible at source even though assessee has not made an
application before the AO.

Transmission Corporation (239 ITR 587) SC:

Sum chargeable to tax may include income or income hidden or embedded in gross
sums.
TDS provisions may apply to gross sums, whole of which may not be income of
recipient
Adequate safeguards provided in Section 195(2) / (3) / 197 where recipient can apply
to AO to determine proportion of income liable to TDS

CBDT Instruction No 2/2014

CBDT vide Instruction No 2/2014 instructed that in cases where the assessee does
not withhold taxes under section 195 of the Act, the AO is required to determine the
income component involved in the sum on which the withholding tax liability is to be
computed and the payer would be considered as being in default for non-withholding
of taxes only in relation to such income component.
11

Chargeability under the Income Tax Act

If payment is not chargeable to tax, the provisions of section 195(1) are not attracted:

Illustrative payments to Non-residents not chargeable under the Act:

Payments on capital account, for example, gifts, loans, repayment of loans, etc.
Sums which are on revenue account and which are not chargeable to tax at all under
the Act in the hands of the recipient
Sums which fall within the scope of Section 5 of the Act, but which are expressly
exempt under the Act. for example, dividend income

12

Payers

Any person
Responsible for paying
Payer itself and in case of company, the company including the principle officer
Including an Individual and HUF (whether or not carrying business)

Agent also liable to deduct tax at source from payments to non-resident principal.

Whether payer includes a non resident?

Whether payment by one non-resident to another non-resident is covered by section

195(1)?

Explanation 2 to sub-section (1) of the section 195 clarifies that the obligation to
comply with sub-section (1) and make deduction thereunder applies and shall be
deemed to have always applied and extends and shall be deemed to have always
extended to all persons, resident or non-resident whether or not the non-resident
person has a residence or place of business or business connection in India or any
other presence in any manner whatsoever in India.

13

Payments to NR Important aspects

14

Payments Who is a NR?

Address of the Non-resident

Meena S. Patil vs ACIT(International Taxation, Circle19(1), [2008] 114 ITD 181

(Bangalore)/[2008] 113 TTJ 863
Assessing Officer was correct in passing an order under section 201(1A) imposing
interest liability on assessee. Assessees contention that it was not and could not
have been aware of fact that seller was a non-resident cannot be considered since
the sale agreement sellers address was clearly mentioned which showed that he
was residing abroad.
Syed Alam Hashami 55 SOT 41 ( Bangalore)

Where seller of Indian property was NRI according to address given in sale deed,
assessee-purchaser ought to have made TDS under section 195 on sale
consideration payable to NRI seller, failing which he was to be treated as assesseein-default under section 201(1).

15

Payments Who is a NR?

Payments made to POA holder of Non-resident

Rakesh Chauhan vs DDIT (International Taxation) [2010] 128 TTJ 116 (CHD.)
Where payment is made by assessee to an individual Resident say (P) in India in
respect of purchase of land which belonged to non-residents but rights therein were
assigned unequivocally to said resident as power-of-attorney holder, such payment
could not be regarded as payment to non-resident so as to require deduction of tax at
source under section 195.
When non-resident himself nominates a particular agent to whom payment should be
made and pursuant to that direction, the assessee pays the sum to the agent so
nominated, the provisions of section 195 of the Act will apply.

16

Key aspects

Amendments provisions under the Act cannot override provisions of DTAA

CIT v. Siemens Aktiengesellschaft (310 ITR 320) Bombay HC

DIT v. Nokia Networks OY [2013] (358 ITR 259) Delhi HC
Sanofi Pasteur Holding SA [2013] (354 ITR 316) Andhra Pradesh HC

Infrasoft Ltd [2013] (220 Taxman 273) Delhi HC

B4U International Holdings Ltd. (52 SOT 545) Mumbai Tribunal

Retrospective amendments made to the definition of royalty in section 9(1)(vi) of the

Finance Act, 2012 by inserting Explanations 4 and 5 with effect from 1 June 1976
applicable to India Singapore DTAA

Verizon Communications Singapore Pte. Ltd. [2013] (361 ITR 575) Madras HC

17

Payments

Payment in kind

Kanchanganga Sea Foods Ltd. v. CIT, (SC) (2010 (6) SCALE 442
The assessee is liable to deduct tax at source under section 195 on the payment made
to the non-resident even though the payment is not made in cash but made in kind

Net payment received

Raymond Ltd. v. DCIT, (86 ITD 791) Mumbai ITAT
The assessee is liable to deduct tax at source under section 195, even under an
arrangement where he receives only net payment from other party after deducting
commission/ management fees etc.

18

Rates

Rates in force

Sec. 195 refers to deduction of tax at the rates in force

Rates in force defined in sec.2(37A)
Rates of income-tax specified in the Finance Act or the rates specified in the DTAA,
whichever is applicable by virtue of Section 90 or Section 90A section 2(37A)(iii) Circular No. 728 of 30 October 1995
M Far Hotels ( Cochin Tribunal) 58 SOT 261

19

Non furnishing of PAN

Section
2(37A)

Section 2(37) states that rate or rates in force would mean for the purpose of section
195 rates of income tax specified in Finance Act or rates as per the agreement by
Central Government u/s 90 of the Act.

Section 90, an assesse can avail the provisions of section 90 only in case if the
provisions of DTAA are more beneficial to him

Section 90

Section
206AA

In case of non availability of the PAN, tax is to be deducted at higher of the following Rates specified in the Act,
Rates in force
20%

Thus, based on the above, 206AA would prevail over section 90

20

Non furnishing of PAN

Supreme Court
in the case of
Azadi Bachao
Andolan

Serum Institute
of India Limited
[2015] (56
taxmann.com 1)
Pune Tribunal

Bangalore
Tribunal in the
case of Infosys
BPO Limited ((IT
(IT) A No.:
1143B/2013))

It is upheld by the supreme court that the provisions made in the DTAAs will prevail over
the general provisions contained in the Act to the extent they are beneficial to the
assessee.

It is held that where tax has been deducted on the strength of the beneficial provisions
of DTAAs, the provisions of section 206AA of the Act cannot be invoked to insist on tax
deduction @ 20%, having regards to the overriding nature of the provisions of section
90(2) of the Act

It is held that there is no scope of deduction of tax at the rate of 20% as per section
206AA (when assesse does not have tax identification number PAN) of the Income-tax
Act, 1961 (the Act) when the benefit DTAA is available to the assesse.

Thus, based on the above decisions, one may take a position that
section 90 shall override section 206AA
21

Grossing up section 195A

If payee bears the tax liability i.e. payment is net of tax then for computing TDS, income
should be grossed up

E.g. Amount payable to NR is 100 and TDS rate is 10%; Gross amt. for TDS purpose
would be 111.11 (100*100/90)

Issues
Whether grossing up would be required to be done in case payment is made net of
tax to a foreign company which does not have a PAN in India, considering the
provisions of section 206AA
Income could be grossed up using the applicable rate e.g.10% and tax could be
withheld at 20%
For e.g.. say total amount to be paid net of tax as per agreement be INR 100. Income
increased to INR 111.11 (grossed by 10%). Tax needs to be withheld @ 20% on
111.11= 22.22.

Bosch Ltd. v. ITO (2013) 141 ITD 38/155 TTJ 354 (Bang.)(Trib.)

22

Tax residence certificate (TRC)

Finance Act 2012

Finance Act 2013
Non-residents to obtain

Notification No. 57 of 2013

TRC (in prescribed format)

Did away the format, stated

from resident tax

that it would be enough if

Additional documents and

authorities.

tax payer obtains TRC and

information Form 10F

maintains prescribed

documents/information

23

Remedies available to the payer

24

Remedy available to the payer Section 195(2)

Application to be made to Assessing Officer (AO) when the payer considers whole
income not to be chargeable

AO to determine the portion of payment chargeable to tax and to issue a certificate

accordingly

The permission granted by the AO would be in force for the period as specified

On determination, tax to be deducted on the sum chargeable to tax

Mangalore Refinery & Petrochemicals Ltd. V. DDIT (113 ITD 85 ) (Mum.)

The assessee cannot be treated in default under s. 201 of the Act because it has
applied under s. 195(2) of the IT Act before the AO, prior to remitting the payment
25

Order under section 195(2) Not Conclusive

Decision under section 195(2) should not be treated as a conclusion in the determination

of income in the case of a foreign company

CIT vs. TELCO [2000] 245 ITR 823 (Bom.)
CIT vs. Elbee Services P. Ltd. [2001] 247 ITR 109 (Bom.)

Dodsal Pvt. Ltd. Vs. CIT [2003] 260 ITR 507 (Bom.)
DCIT vs. Arthur Andersen ITA No. 9125/Mum/1995 dated 29-07-2003 (ITAT, Mumbai)

Aditya Birla Nuvo v. DDIT 342 ITR 308 (Bombay)

The order under sec. 195(2) is tentative in nature and does not have any effect
beyond providing immunity under sec. 201 and does not preclude the assessing
officer to either reexamine the chargeability of income in regular assessment
proceedings or to recover the taxes from the payer in his representative capacity.

26

Remedy available to the Payer

Section 195(6) CA Certificate

Information on remittance of amount to be furnished by the payer in Form 15CA
Certificate from Chartered Accountant may be obtained in Form 15CB
Procedure prescribed in Rule 37BB of the Income Tax Rules
Changes by Finance Act 2015. Information to be furnished irrespective of whether
sum chargeable or not. Penalty of Rs. 1 lac under section 271-I.

27

Amendment to section 195( 6)

The amended provision provides that the information relating to payment of any sum,
whether or not chargeable under the provisions of the Act, shall be furnished in such form
and manner, as may be prescribed.

Rule 37BB provides that any person responsible for paying to a non-resident, not being a
company, or to a foreign company, any sum chargeable to tax under the provisions of the
Act shall furnish information in Form Nos. 15CA and 15CB.

Until Rule 37BB and Form Nos. 15CA and 15CB are amended to give effect to the
amended provision of Section 195(6) or form and manner for furnishing
information is prescribed, a payer is required to furnish only information relating
to payment of sum chargeable to tax under the provisions of the Act.

However, for all foreign remittances, banks have mandate to provide for such information.
Thus, it is prudent to have such documentation in place for all foreign remittances.

28

Compliance procedure section 195(6)

Rule 37BB

Information is to be furnished by any person responsible to make payment to non

resident in the prescribed form.

According to rule 37BB of the income tax rules, following information is to be submitted
Form 15CA Prescribes the information to be furnished by the payer

Form 15CB Prescribes the format of certificate to be obtained by the Chartered

Accountant by the payer
Form

Applicability

Form 15CA (Part A)

If the amount of payment does not exceed fifty thousand rupees

and the aggregate of such payments made during the financial
year does not exceed two lakh fifty thousand rupees;

Form 15CA (Part B)

In any other case alongwith

A certificate in Form 15CB or
A certificate from the Assessing Officer under section 197; or
An order from the Assessing Officer under sub-section (2) or
sub-section (3) of section 195

Presentation on provisions of section 195

29

Step wise procedure for foreign remittance

Rule 37BB
Obtains certificate of Accountant (Form 15CB) Refer
Appendix A

Electronically uploads the remittance details in Form

15CA

Takes printout of filled form (15CA) with system

generated Acknowledgement Number

Printout of the undertaking form (15CA) is signed

Submits the signed paper undertaking form to the

RBI/AD along with certificate of an Accountant in
duplicate. RBI/Authorized dealer remits the Amount
Presentation on provisions of section 195

30

About Form 15CB

What is form 15CB and its requirements

Issued by a certificate issued a Chartered Accountant wherein it specifies the documents

are verified by him and provides Detail enumeration of the taxability of the amount under the Income-tax Act, without
giving any effect to the DTAA.
Where DTAA provisions are sought to be applied, the details of the Tax Residency
Certificate, applicable DTAA and its relevant article, as also tax liability under the
DTAA are to be furnished. The nature of remittance is divided as for royalties,
FTS, interest, dividend; on account of business income; on account of short-term and
long-term capital gains; and any other remittance.

Following documents are required while issuing form 15CB

Agreement entered between the parties (payee and payer)
Invoice / documentary evidence
Challan evidencing payment of withholding tax (if tax payable)

Tax residency certificate (TRC) (in case of claiming DTAA benefit)

Form 10F (where specific details as required by the Government of India is not
mentioned in TRC) (in case of claiming DTAA benefit)
No PE certificate
31

About Form 15CB

Requirements for Form 10F and TRC

Name of the beneficiary

Address of the
beneficiary

PAN (if allotted)

Nationality

TIN of the beneficiary

Period of residential
status

Whilst the prescribed format of TRC was done away with by the Finance Act, 2013, it did provide that
additional information and documentation shall be furnished separately. Rule 21AB was consequently
amended, which provides that aforesaid information of the foreign assessee is required to be furnished
(10F), and sufficient documentation to substantiate the same shall be maintained.
It is to be noted here that Form 10F is only an ad hoc requirement in order to enable the non-residents to
disclose certain information which is not mentioned in the TRC. In case, if the TRC is inclusive of all the
requisite information, there is no need to furnish the Form 10F.
Presentation on provisions of section 195

32

Guidance Note on Audit Reports and Certificates

for Special Purposes

Specific elements, accounts or items covered by the report or certificate should be clearly
identified and indicated.

The report or certificate should indicate the manner in which its audit was conducted.

If the report or certificate is subject to any limitations, then such limitation should be
clearly mentioned.

Assumptions on which the special purpose statement is based should be clearly

indicated if they are fundamental to the appreciation of the statement.

References obtained should be included in the report or certificate i.e. any specific
information or explanations on which is relied upon.

The language should be unambiguous.

If the special purpose statement is based on general purpose financial statements, the
report or certificate should contain a reference to such statements and the said
statements should also form part of annexure.

An report or certificate should ordinarily be a self-contained document.

The issuing authority should clearly indicate in his report or certificate, the extent of
responsibility which he assumes.

Any modification in form of report or certificate from the manner as prescribed by statue
should be clearly indicated.
33

Chartered Accountants Certificate Important

issues

If person responsible considers that the sum payable would not be income, would he be
required to go to the A.O every time or will a CA certificate suffice?
DCIT vs. Rediff.com India Ltd. (ITA No. 3061/Mum/2009)
Chartered Accountant's certificate for TDS on payments to non-residents had no
decisive impact on determination of taxability of payments to non-residents. It is
only prima facie evidence about taxability status and cannot substitute adjudication
of taxability by the AO
ADIT vs. Tata Communications Ltd (ITA No. 3061/Mum/2009)
Where the assessee had duly obtained the Chartered Accountants certification
regarding applicability of tax withholding and based on the certification, made the
remittance for deduction at source. A demand u/s.201(1A) cannot be raised on the
assessee merely because he had not obtained prior approval of the Assessing
Officer u/s.195(2) of the Act.

34

Obligation of the payer

Onerous requirement to determine the taxability of the payment:

Evaluate application of provisions of the Act for taxability after characterization

Evaluate applicability of the tax treaty

Get confirmation whether the payee has a PE in India

Be aware of recent judicial precedents

Observe the deadlines for withholding taxes and depositing the same

Suffer disallowance if the tax is not withheld/ partly withheld if revenue believes that it
should have been withheld

35

Remedies available to the payee

36

Appeal against order under section 195/197

Appeal against the order under section 195 Can be filed before the Commissioner of Income-tax (Appeals) under section 248
against the order passed by the Assessing Officer

Order under section 197 is not appealable -

A revision petition under section 264 would lie against such an order

37

Taxation of reimbursement overseas to

non resident

38

Reimbursement of Expenses Decisions in

favour

Director IT vs. Krup Udhe GmbH. (2010) (38 DTR 251) Bombay
Amount received by assessee towards reimbursement of traveling expenses of its
technicians who were deputed to the establishment of a customer is not chargeable
to tax.

CIT vs. Siemens Aktiongesellschaft (310 ITR 320)

The reimbursement of expenses incurred on behalf of payer was not income
chargeable to tax in payee's hands.

Steffen, Robertson and Kirsten Consulting v. CIT (230 ITR 206) (AAR)
Daily allowance and expenses of technicians part of FTS agreement

Danfoss Industries P. Ltd. (268 ITR 1) (AAR)

Reimbursement of group costs on reasonable basis, possibility of embedded

income

39

Reimbursement of Expenses

Pure Reimbursement of expenses to non-resident

No TDS on reimbursement of actual expenditure to non-resident parent company since no

element of income
CIT vs. Dunlop Pvt. Ltd. : 142 ITR 493 (Cal)
CIT vs. Industrial Engineering product Pvt. Ltd. : 202 ITR 1014 (Del)
Hyder Consulting Ltd. vs. CIT: 236 ITR 640 (AAR)
HNS India V. Set. Inc. vs. DCIT: 95 ITD 157 (ITAT Del)
United Hotels Ltd. vs. ITO : 93 TTJ 822 (ITAT Del)
Mahindra & Mahindra Ltd. v. Dy. CIT (2009) 30 SOT 374 (Mum),

40

Taxation of Commission paid to

Overseas Non Resident Agent

41

Commission paid to non resident - whether

deemed to accrue or arise in India

Section 9(1)(i): Business Connection in India: Commission paid to Non Resident

Section 9(1)(i) is applicable on the net the profits of a non resident which can
reasonably be attributed to operations carried out in India.
The expression "business connection" nominates a real and intimate relating
between trading activity carried on outside the taxable territories and trading activity
within the territories, the relating between the two contributing to the earning of
income by the nonresident in his trading activity. SC in CIT vs. R. D. Aggarwal & co.
(56 ITR 20)
Any activity carried on in India by Broker, General Commission Agent or any other
agent having Independent Status in the ordinary course of business will not constitute
Business Connection in India. [Explanation 2 to Section 9 (1) (i)]

42

CBDT Circulars

Circular No. 23 dated 23rd July, 1969

A foreign agent of Indian exporter operates in his own country and no part of his
income arises in India.

Circular No. 786 dated 7th February 2000

The deduction of tax at source under section 195 would arise if the payment of
commission to the non-resident agent is chargeable to tax in India.
Where the non-resident agent operates outside the country, no part of his income
arises in India.

Circular 7/2009 dated 22nd October 2009

Withdrawal of Circular 23 and 786 As the interpretation of the circular by the
taxpayers to claim relief is not in accordance with the provisions of section 9 or the
intention of the Circular.

However, the principle still holds good that the payments to non-resident are liable for
tax in Indian only if they satisfy the test of chargeability in India.
43

Judicial Precedents Commission

Panalfa Autoelektrik Ltd. [2014] 49 Taxmann. Com 412 (Delhi HC)

Facts:

Panalfa Autoelektrik Ltd. India, was engaged in manufacturing business and made an
application to the Assessing Officer (AO) to decide the withholding tax as regards
commission to be remitted to a non-resident company registered in Liechtenstein, for
arranging export sales and realising payments.

In absence of a tax treaty between India and Liechtenstein, the AO decided the taxability
of commission under the ITA and held that the same to be taxable as FTS.

Issue:
Whether the commission payable to the non-resident agent could be Income accruing or
arising, whether directly or indirectly, through or from any business connection in India or
income by way of FTS payable by a person who is a resident

Held:

As there was no allegation or argument from the revenue on the existence of business
connection or as regards any operations being carried on by the non-resident in India, the
High Court concluded that no income can be taxed in India under this provision.
44

Judicial Precedents Commission

Panalfa Autoelektrik Ltd. [2014] 49 Taxmann. Com 412 (Delhi HC)
Held:
The High Court interpreted the terms managerial, technical and consultancy by placing
reliance on various judicial precedents, Dictionary meanings as well as the OECD Report
on e-commerce
As regards the services provided by the non-resident agent, the High Court observed as
under:

As per the agreement between the taxpayer and the non-resident agent, it was clear that the nonresident was acting as an agent for procuring orders and was not rendering managerial advice or
management services.
The non-resident had not undertaken or performed technical services, where special skills or
knowledge relating to a technical filed were required.

The non-resident had acquired skills and expertise in the field of marketing and sale of
automobiles. However, the same was used for own benefit and to secure their
commission.
The non-resident did not act as a consultant, who advised or rendered any counseling
services. The High Court, accordingly, held that services rendered by the non-resident
cannot be said to be in the nature of managerial, technical or consultancy services and
hence, the commission cannot be treated as FTS.
The High Court however added a note of caution that in case of selling agents, taxability
would depend upon the nature of service rendered and, depending on the factual matrix,
the services may fall in the category of consultancy services.
45

Judicial Precedents Commission

CIT v. Eon Technology (P) Ltd. (2012) 246 CTR 40 (Delhi)(High Court)
Facts:
The tax payer company was engaged in the business of development and export of
software
The tax payer paid commission to its parent company in the U.K. on the sales and
amounts realised on export contracts procured by it for the tax payer and the same was
claimed as deduction.
Issue: Whether income deemed to accrue or arise in India
Held:
When a nonresident agents operates outside the country, no part of income arises in India
and since payment is remitted directly abroad and merely because an entry in the books of
account is made in India, it does not mean that non-resident has received any payment in
India, therefore, assessee is not liable to deduct tax at source hence, no disallowance can be
made by applying the provision of section 40(a)(i).
Not Chargeable to tax in India pre-withdrawal of circular - Allied Nippon Ltd.; Angelique
International Ltd. Capricorn Food Products India Ltd.
Chargeable to tax in India Havells India Ltd. 352 ITR 376, SKF Boilers 343 ITR 325
46

Clause by Clause look at form 15CB

Presentation on provisions of section 195

47

Snapshot of form 15CB

Clause

Sub
Clause

Particulars

Explanation
Name and address of the entity to whom the
payment shall be remitted

Name and address of the

beneficiary of the remittance

Country to which remittance is The country in which remittance is to be

made
remitted

Amount

Payable

Amount of payment to be made to be

denominated in Indian currency as well as
foreign currency

Name of the bank

Name of the bank from which remittance is to

be made

BSR Code of the bank branch (7 BSR Code of the bank branch
digit)
Proposed date of remittance
The date shall be filled in (dd/mm/yyyy) format

Nature of remittance as per

agreement / document
In case the remittance is net of
taxes, whether tax payable has
been grossed up?

Underline transaction between the parties

The grossing up provision will be applicable
when the
the Indian remitter will bear the tax cost as
agreed between the parties See section 195 A
and slide no )

Snapshot of form 15CB

Clause

Sub
Clause

Particulars

Explanation

Taxability under the provisions of

the Income tax Act (without
considering DTAA)
The relevant Section of the Act
under which the remittance is
covered
The amount of Income
Chargeable to tax

Details of taxability of the remittance made is

to be provided as per the following clauses

8a

8b

8c

The tax Liability

The amount of tax computed on the above

income as per the provisions of the Act

8d

Basis of determining taxable

income and tax liability

Specify the rationale and reasoning for

considering the above transaction chargeable
to income tax

9(i)

9(ii)

If any relief is claimed under

DTAAWhether tax residency certificate Tax residency certificate is a must to avail of
is obtained from the recipient of the beneficial provisions of DTAA.
remittance
Please specify relevant DTAA
Country where the remittance is made

Provisions of the Act under

remittance is chargeable to tax

which

the

Taxable income as per the Act

Snapshot of form 15CB

Clause
B

Sub
Clause
9(iii)

Particulars

Explanation

Please specify relevant article of Relevant article of DTAA is to be provided. E.g.

DTAA
Article 12 incase of Royalty or fees for
technical services

9(iv)

taxable income as per DTAA

The amount of Income Chargeable to tax

9(v)

Tax Liability as per DTAA

The amount of tax computed on the above

income as per the article of DTAA

9A

Where the remitter provides for a NO PE

Certificate, and the remittance made is in the
nature of payment as mentioned in the clause,
details are to be provided in this clause

9A(a)

If the remittance is for royalties,

fee for technical services,
interest, dividend, etc. (not
connected with permanent
establishment) please indicate:Article of DTAA

9A(b)

The rate at which tax is to be withheld as per

the article of the DTAA

9B

Rate of TDS required to be

deducted In terms of such article
of the applicable DTAA
In case the remittance is on
account of business income
please indicate

Relevant article under which the income is

chargeable to tax

Details are to provided in this clause, when the

receiving entity has a business income in India
through its PE

Snapshot of form 15CB

Clause

Sub
Clause

Particulars

Explanation

The amount of income liable to

tax in India

Taxable income

The basis of arriving at the rate

of deduction of tax

Specify the rationale and reasoning for

considering the above transaction chargeable
to income tax

In case the remittance is on

account of capital gains please
indicate:Amount of long term capital
gains

Where the income is chargeable to tax under

the head capital gains, details are to be
provided as per this clause

9C

9C(a)

9C(b)

9C(c)

9D

9D(a)

Amount of short- term capital

gains
Basis of arriving at taxable
income
In case of other remittance not
covered by sub-items A,B and C
Please specify nature of
Remittance

Specify the rationale and reasoning for

considering the above transaction chargeable
to income tax

Nature of transaction other than as specified in

clause 9A, B and C

Snapshot of form 15CB

Clause

Sub
Clause

Particulars

Explanation

9D(b)

9D(c)

Whether taxable in India as per

The same should be ticked yes if affirmative.
DTAA
If yes, rate of TDS required to be The rate at which tax is withheld on the taxable
deducted in terms of such article income.
of the applicable DTAA

9D(d)

If not the please furnish brief

reasons thereof specifying
relevant article of DTAA

Specify the rationale and reasoning if the

transaction not chargeable to tax as per DTAA.
Make a mention of the article of the DTAA and
give reference to case laws wherever one is
relying on a case law for a lower rate or nil rate
as per DTAA

10

Amount of TDS

Amount of tax withheld in Indian currency

11

Rate of TDS

The rate at which tax is withheld on the taxable

income.

12

Actual amount of remittance

after TDS

The net remittance to

withholding the income tax

13

Date of deduction of tax at

source, if any

Date on which the tax is deducted

be

made

post

Thank You

Presentation on provisions of section 195

53