15CB certificate if TDS not detected.

Background:

• Section 195 mandates TDS on payments to non-residents (including capital gains on mutual funds).

• If TDS was not deducted at source, but the tax liability has been paid by the non-resident (advance tax or self-assessment tax), the question arises about how to get Form 15CB for outward remittance.

Can Form 15CB Be Issued Without TDS Deduction?

Yes, but with important points:

1. Form 15CB is a Chartered Accountant’s certificate certifying:

   • The nature of remittance,

   • The applicable tax rate under DTAA or Income Tax Act,

   • Tax deducted at source (TDS) or tax payable on such remittance,

   • And whether taxes are fully paid.

2. If TDS is not deducted (because the payer failed to deduct), but the non-resident has paid tax liability (advance tax/self-assessment tax), the CA can still issue Form 15CB, certifying:

   • That tax liability exists,

   • The amount of tax paid by the non-resident,

   • That no TDS was deducted at source,

   • And the reasons why TDS is not deducted or the relief under DTAA if applicable.

3. In Form 15CB, the CA can mention:

   • TDS rate applicable as per Section 195 and DTAA (if any),

   • TDS amount as NIL (if no TDS deducted),

   • Tax amount paid by way of advance tax/self-assessment tax in the remarks or notes section.

What About Surcharge?

• Section 195 requires deduction of tax including surcharge and cess.

• If the non-resident has not paid surcharge with advance tax, the CA can mention this as an exception or shortfall.

• Ideally, the non-resident should pay the full tax liability including surcharge and cess via advance tax/self-assessment tax before remittance.

• The CA may recommend payment of balance surcharge before issuance or flag it in remarks.

Practical Steps:

1. The non-resident should provide:

   • Copy of the advance tax/self-assessment tax challans,

   • Computation of tax liability including surcharge and cess,

   • Explanation for no TDS deduction.

2. The CA will:

   • Verify tax payment,

   • Certify tax liability and TDS status in 15CB,

   • State if any amount is outstanding (like surcharge).

3. The bank will accept Form 15CB along with Form 15CA for remittance.

Summary Table