W.e.f 1st June 2015, Penal provision (New section 271-I) for not furnishing Form 15CA and Form 15CB has been introduced under the Income tax act, 1961.
"271-I. If a person, who is required to furnish information under sub- section (6) of section 195, fails to furnish such information; or furnishes inaccurate information, the Assessing Officer may direct that such person shall pay, by way of penalty, a sum of one lakh rupees."
Section 195(6) read as under :
"Section 195(6) The person responsible for paying to a non-resident, not being a company, or to a foreign company, any sum, whether or not chargeable under the provisions of this Act, shall furnish the information relating to payment of such sum, in such form and manner, as may be prescribed under Rule 37BB of The Income Tax Rules,1962."
Rule 37BB read as below :
37BB . (1) Any person responsible for paying to a non-resident, not being a company, or to a foreign company, any interest or salary or any other sum chargeable to tax under the provisions of the Act, shall furnish the following, namely:—
||the information in Part A of Form No.15CA, 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;
||the information in Part B of Form No.15CA for payments other than the payments referred in clause (i) after obtaining—
||a certificate in Form No. 15CB from an accountant as defined in the Explanation below sub-section (2) of section 288; 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.
(2) The information in Form No. 15CA shall be furnished by the person electronically to the website designated by the Income-tax Department and thereafter signed printout of the said form shall be submitted to the authorised dealer, prior to remitting the payment.
(3) An income-tax authority may require the authorised dealer to furnish the signed printout referred to in sub-rule (2) for the purposes of any proceedings under the Act.
(4) The Director General of Income-tax (Systems) shall specify the procedures, formats and standards for ensuring secure capture, transmission of data and shall also be responsible for the day-to-day administration in relation to furnishing the information in the manner specified.
Explanation 1.—For the purposes of this rule, "authorised dealer" means a person authorised as an authorised dealer under sub-section (1) of section 10 of the Foreign Exchange Management Act, 1999 (42 of 1999).
Explanation 2.—For the removal of doubts, it is hereby clarified that for payments of the nature specified in column (3) of the specified list below, no information is required to be furnished under sub-rule (1).
||Purpose code as per RBI
||Nature of payment
||Indian investment abroad-in equity capital (shares)
||Indian investment abroad-in debt securities
||Indian investment abroad-in branches and wholly owned subsidiaries
||Indian investment abroad-in subsidiaries and associates
||Indian investment abroad-in real estate
||Loans extended to Non-Residents
||Payment for operating expenses of Indian shipping companies operating abroad.
||Operating expenses of Indian Airlines companies operating abroad
||Booking of passages abroad - Airlines companies
||Remittance towards business travel.
||Travel under basic travel quota (BTQ)
||Travel for pilgrimage
||Travel for medical treatment
||Travel for education (including fees, hostel expenses etc.)
||Construction of projects abroad by Indian companies including import of goods at project site
||Freight insurance - relating to import and export of goods
||Payments for maintenance of offices abroad
||Maintenance of Indian embassies abroad
||Remittances by foreign embassies in India
||Remittance by non-residents towards family maintenance and savings
||Remittance towards personal gifts and donations
||Remittance towards donations to religious and charitable institutions abroad
||Remittance towards grants and donations to other Governments and charitable institutions established by the Governments
||Contributions or donations by the Government to international institutions
||Remittance towards payment or refund of taxes
||Refunds or rebates or reduction in invoice value on account of exports
Payments by residents for international bidding. ]
Therefore, Section 271-I shall be read in consonance with Rule 37BB. COmbined reading of this provisions provides that Form 15CA and 15CB required for all transaction provided it doesnt fall within the exception list (see above table) as mentioned under Rule 37BB. Remittance for education purpose falls within purview of exception list and therefore no need for Form 15CA and 15CB.
Thanks and Regards,
Manoj B. Gavali