Foreign remittense and forms 15ca 15cb
This query is : Resolved
17 March 2016
A private limited company, made payment to Amazon (bill in the name of one of the directors) through credit card (by other director or probably his father who is not on management board) of about USD 1500 for hiring server/space in server used by the company. My queries are; 1.Whether this payment is covered by provisions of TDS, if yes then under which section? Now since the 100% payment is already done whether any remedy is available?
2.Who is liable to deduct tax?
3.Whether Forms 15CA and 15CB are required to be filed, if yes then who is suppose to file it, director or company? If not, then why?
4.Any other suggestions/advise. Whether stand can be taken that since the bill is in individuals name and payment was made through credit card of other individual (irrespective of status of the user of the service), no TDS was required?
2.Who is liable to deduct tax?
3.Whether Forms 15CA and 15CB are required to be filed, if yes then who is suppose to file it, director or company? If not, then why?
4.Any other suggestions/advise. Whether stand can be taken that since the bill is in individuals name and payment was made through credit card of other individual (irrespective of status of the user of the service), no TDS was required?
25 July 2024
Based on the details provided regarding the payment to Amazon for server space used by the company, here are the responses to your queries:
1. **TDS Applicability and Section:**
- The payment made to Amazon for server space rental is for a service rendered, and it does fall under the purview of TDS (Tax Deducted at Source) as per the Income Tax Act, 1961. According to Section 195 of the Income Tax Act, TDS is applicable on any payment made to a non-resident which is chargeable to tax in India. Since Amazon is likely a non-resident entity, the payment could attract TDS.
- TDS is applicable at the time of credit of such income to the account of the payee or at the time of payment, whichever is earlier. In your case, since the payment has already been made, the opportunity to deduct TDS at source has been missed.
2. **Liability to Deduct Tax:**
- The liability to deduct TDS lies with the person making the payment. In this scenario, since the payment was made by the company (through a credit card), the private limited company is liable to deduct TDS.
3. **Forms 15CA and 15CB:**
- Forms 15CA and 15CB are required to be filed for making remittances (payments) to non-residents. Form 15CA is a declaration of the remitter and Form 15CB is a certificate from a Chartered Accountant. These forms ensure that taxes, if any, are deducted correctly at source.
- In this case, the company (the private limited company) is required to file Forms 15CA and 15CB before making the remittance to Amazon. These forms help in complying with the reporting requirements under the Income Tax Act for foreign remittances.
4. **Stand Regarding Bill in Individual's Name:**
- The fact that the bill is in the name of one of the directors or his father does not necessarily exempt the company from TDS obligations. The key point is whether the payment is made for services rendered by a non-resident entity (Amazon) which are chargeable to tax in India.
- Since the payment was made through the company's credit card and is for services used by the company, the company is still considered the entity making the payment and therefore liable for TDS compliance.
**Advice:**
- **Consultation:** It's advisable to consult with a tax advisor or a Chartered Accountant who can assess the specific circumstances and provide tailored advice.
- **Rectification:** Since TDS was not deducted at the time of payment, the company should assess if there are any rectification procedures available under tax laws to address the non-compliance.
- **Future Compliance:** Ensure that going forward, the company complies with TDS requirements before making any similar payments to non-resident entities to avoid penalties and interest for non-compliance.
By seeking professional advice and ensuring compliance with tax regulations, the company can address the current situation and prevent future issues related to TDS on foreign remittances.
1. **TDS Applicability and Section:**
- The payment made to Amazon for server space rental is for a service rendered, and it does fall under the purview of TDS (Tax Deducted at Source) as per the Income Tax Act, 1961. According to Section 195 of the Income Tax Act, TDS is applicable on any payment made to a non-resident which is chargeable to tax in India. Since Amazon is likely a non-resident entity, the payment could attract TDS.
- TDS is applicable at the time of credit of such income to the account of the payee or at the time of payment, whichever is earlier. In your case, since the payment has already been made, the opportunity to deduct TDS at source has been missed.
2. **Liability to Deduct Tax:**
- The liability to deduct TDS lies with the person making the payment. In this scenario, since the payment was made by the company (through a credit card), the private limited company is liable to deduct TDS.
3. **Forms 15CA and 15CB:**
- Forms 15CA and 15CB are required to be filed for making remittances (payments) to non-residents. Form 15CA is a declaration of the remitter and Form 15CB is a certificate from a Chartered Accountant. These forms ensure that taxes, if any, are deducted correctly at source.
- In this case, the company (the private limited company) is required to file Forms 15CA and 15CB before making the remittance to Amazon. These forms help in complying with the reporting requirements under the Income Tax Act for foreign remittances.
4. **Stand Regarding Bill in Individual's Name:**
- The fact that the bill is in the name of one of the directors or his father does not necessarily exempt the company from TDS obligations. The key point is whether the payment is made for services rendered by a non-resident entity (Amazon) which are chargeable to tax in India.
- Since the payment was made through the company's credit card and is for services used by the company, the company is still considered the entity making the payment and therefore liable for TDS compliance.
**Advice:**
- **Consultation:** It's advisable to consult with a tax advisor or a Chartered Accountant who can assess the specific circumstances and provide tailored advice.
- **Rectification:** Since TDS was not deducted at the time of payment, the company should assess if there are any rectification procedures available under tax laws to address the non-compliance.
- **Future Compliance:** Ensure that going forward, the company complies with TDS requirements before making any similar payments to non-resident entities to avoid penalties and interest for non-compliance.
By seeking professional advice and ensuring compliance with tax regulations, the company can address the current situation and prevent future issues related to TDS on foreign remittances.
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