15ca/cb
This query is : Resolved
07 July 2016
a foreigner want to purchase a flat in india. he made advance payment ??50001but after that dealing is canceled.
india person made payment to foreigner which form to be field.
14 July 2024
When a foreigner cancels a deal to purchase a flat in India and receives a refund of the advance payment, the Indian person making the payment needs to consider the tax implications under Indian law. Here’s what typically applies in such a scenario:
### Form to be Filed:
1. **Form 15CA and Form 15CB:**
- If the refund of advance payment to the foreigner exceeds ₹ 50,000, the Indian person needs to file Form 15CA and obtain a certificate in Form 15CB from a Chartered Accountant (CA).
- Form 15CA is an undertaking for remittance made abroad without the deduction of tax.
- Form 15CB is a certificate issued by a CA certifying details of the payment, nature of payment, and taxability under Indian tax laws.
### Procedure:
- **Form 15CA:** The Indian person making the payment needs to fill out Form 15CA online on the Income Tax Department’s e-filing portal (https://www.incometaxindiaefiling.gov.in).
- **Form 15CB:** After filling out Form 15CA, the Indian person must obtain Form 15CB from a CA. The CA will verify the details of the payment and certify whether tax is deductible under Indian tax laws.
- **Submission:** Both Form 15CA and Form 15CB (signed and stamped by the CA) need to be submitted electronically on the Income Tax Department’s portal before making the payment to the foreigner.
### Important Considerations:
- Ensure that the details provided in Form 15CA and Form 15CB are accurate and match the transaction details.
- If the refund amount is below ₹ 50,000, Form 15CA/Form 15CB may not be required, but it’s advisable to consult with a tax advisor to confirm.
### Penalty for Non-Compliance:
- Failure to comply with the requirement of filing Form 15CA/Form 15CB when required can lead to penalties under the Income Tax Act. It’s crucial to ensure timely and accurate compliance to avoid penalties.
### Professional Advice:
- Given the complexities involved in international transactions and tax implications, it’s recommended to consult with a Chartered Accountant or tax advisor who can guide you through the process and ensure compliance with Indian tax laws.
By following these steps and ensuring proper documentation, the Indian person can fulfill their obligations under Indian tax laws when refunding the advance payment to the foreigner for the canceled flat purchase.
### Form to be Filed:
1. **Form 15CA and Form 15CB:**
- If the refund of advance payment to the foreigner exceeds ₹ 50,000, the Indian person needs to file Form 15CA and obtain a certificate in Form 15CB from a Chartered Accountant (CA).
- Form 15CA is an undertaking for remittance made abroad without the deduction of tax.
- Form 15CB is a certificate issued by a CA certifying details of the payment, nature of payment, and taxability under Indian tax laws.
### Procedure:
- **Form 15CA:** The Indian person making the payment needs to fill out Form 15CA online on the Income Tax Department’s e-filing portal (https://www.incometaxindiaefiling.gov.in).
- **Form 15CB:** After filling out Form 15CA, the Indian person must obtain Form 15CB from a CA. The CA will verify the details of the payment and certify whether tax is deductible under Indian tax laws.
- **Submission:** Both Form 15CA and Form 15CB (signed and stamped by the CA) need to be submitted electronically on the Income Tax Department’s portal before making the payment to the foreigner.
### Important Considerations:
- Ensure that the details provided in Form 15CA and Form 15CB are accurate and match the transaction details.
- If the refund amount is below ₹ 50,000, Form 15CA/Form 15CB may not be required, but it’s advisable to consult with a tax advisor to confirm.
### Penalty for Non-Compliance:
- Failure to comply with the requirement of filing Form 15CA/Form 15CB when required can lead to penalties under the Income Tax Act. It’s crucial to ensure timely and accurate compliance to avoid penalties.
### Professional Advice:
- Given the complexities involved in international transactions and tax implications, it’s recommended to consult with a Chartered Accountant or tax advisor who can guide you through the process and ensure compliance with Indian tax laws.
By following these steps and ensuring proper documentation, the Indian person can fulfill their obligations under Indian tax laws when refunding the advance payment to the foreigner for the canceled flat purchase.
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