Remittances to non-residents may soon get monitored and tracked in a timely manner by the Income Tax department. From July 1, information on the payments made to a non-resident or a foreign company should be electronically furnished to the tax department prior to making the payment. The obligation of providing this information to the tax department lies with the person making the remittance. Under the Indian income-tax law, it is such persons who are responsible for the deduction of tax at source. The Central Board of Direct Taxes (CBDT) is keen to monitor and track payments made to non-residents to ensure that taxes are recovered at the stage of remittance itself. Otherwise, it would be difficult to recover the taxes from the non-residents at a later stage, according to the tax department. The department has now come up with a new Form 15CA that spells out the information and the format in which they are required to be submitted. Besides, the CBDT has also mandated electronic filing of information on the accountant’s certificate. This new procedure is only for payments other than salaries to the non-residents. The payments that could be covered include royalty, fee for technical services and so on. Prior to this new procedure, a person making a remittance to a non-resident was required to give an undertaking addressed to the assessing officer accompanied by a certificate from an accountant in a specified format. These were submitted to the Reserve Bank of India or its authorised dealers who in turn were required to forward a copy to the assessing officer. In the recent years, there had been substantial increase in foreign remittances, making the manual handling and tracking of certificates. Hence, the move to introduce e-filing of such information. – www.thehindubusinessline.com
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