Form 15ca/cb for non-revenue items ???

Normally every payment from resident to Non resident requires form 15ca/cb complaince. Whether the same is applicable for non-revenue transactions like loans taken by NR from Resident ?

Replies (3)

According to section 195 of Income tax  "Any person responsible for paying to a non-resident, not being a company, or to a foreign company, any interest or any other sum chargeable under the provisions of this Act (not being income chargeable under the head “Salaries” ) shall, at the time of credit of such income to the account of the payee or at the time of payment thereof in cash or by the issue of a cheque or draft or by any other mode, whichever is earlier, deduct income-tax thereon at the rates in force"

So only for payments which are chargeable under Income tax act are required for tax deduction at source.

There is no need to deducted tax  if payment is in nature of loan, as the same is not chargeable to tax.However we can't presume that all non revenue transactions are not chargeable to tax. Capital gains even though non revenue transactions are taxable as per Indian Income tax Act 

I agree that no TDS shall apply on loans. However Bankers insist upon form 15ca/cb for transferring such funds also. Where in form15ca online does not have nature of remittance reference for other than income items (example loans).

So finally I believe form 15ca/cb compliance shall not be required if Resident gives a loan to NR....

Any suggestions ???

There is a restriction of resident giving loan to NRI in general ,however the samne is allwed in some specific conditions.

Form 15Ca /CB are applicable for the non-revenue items also.

Anuj

femaquery @ gmail.com

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