Form 15CB filling clarification

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This discussion clarifies the 'grossing up' requirement when filing Form 15CB under the Income Tax Act 1961. It explains that if a remittance is made 'net of taxes', meaning taxes have already been deducted, you need to calculate the original amount before tax was taken out. This involves adding the deducted tax back to the net remittance amount to determine the grossed-up figure.

Umashankara HB

Umashankara HB (Querist)

07 November 2024 Hi, While filing form 15CB as per Income Tax Act 1961, Its asking In case the remittance is net of taxes, whether tax payable has been grossed up? What does that mean please explain with example

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

07 November 2024 In case you bear the tax payment and foreign remittance is without any tax deduction, you have to gross up the tax payable by you including the foreign remittance Plus your tax payment.

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Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

07 November 2024 When a remittance (payment) is made net of taxes, it means that the taxes have already been deducted from the payment amount.
"Grossing up" refers to the process of adding back the taxes to the net amount, to determine the original amount before taxes were deducted.
To illustrate:
Net of taxes: If someone receives ₹80 as a remittance, and it's mentioned that this is "net of taxes", it means taxes have already been deducted. Let's say the tax rate is 20%. This means ₹80 is the amount after deducting 20% tax. So Grossing up will be ₹ 100/-

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