CELEBI DELHI CARGO TERMINAL MANAGEMENT INDIA PVT.LTD

23 ROOM NO. , Import building 3, Cargo terminal , IGIMOB. (+9111) 47630900

FOREIGN PAYMENT

The payment of other country due to any causes as known as foreign

payment.

Procedure of Foreign Remittance

• The person making payments shall obtain a certificate from accountant in Form 15CB providing details in Form.

• The person shell file a form 15CA electronically after login into account at income tax portal

• Write on acknowledgement number generated by the system for future references.

• Take print out of Form 15CA and get signed by authorized person.

• Submit the duly signed form 15CA, 15CB and copy of bills to the RBI or any other authorized dealer.

• Exchange rate used for the payment shall be used for deposition of TDS .

TDS ON FOREIGN PAYMENTS

• As per Section 195 TDS shall be deducted on the payment made to Non-Resident at the prescribed rate. As per RBI Guidelines, Every payment except some specifically exempted payment shall be attached with form 15CA along with a certificate from a Accountant in Form 15CB.

CATEGROY OG FOREIGN PAYMENTS

• If the remittance is chargeable to tax and does not exceed Rs. 50000/- and the aggregate of such remittances in financial year information in does not exceed 250000/- Part-A of Form 15CA required and Form 15CB not required.

• Other cases i.e where remittance is chargeable to tex and exceeds RS. 50000/- and the aggregate of such remittances in financial year information in exceeds Rs. 250000/- Part-A &Part-B of Form 15CA required, also From 15CB required.

For cases falling under clause (ii) above the person is also required to obtain a

certificate as under

• A certificate in form 15CB form a Chartered Accountant; or

• A certificate form Assessing Officer under section 197 ; or

• An order form the Assessing Officer under sub- section (2) of section 195 for determining the appropriate proportion for tax deduction or sub-section (3) of section 195 for no deduction.

Withholding (TDS) shall be deducted as under

Apply Domestic TDS provision as per Part –II of First Schedule of finance Act/XVIIB Chapter (Withholding tax rates for Non-resident) of income tax Act.Apply respective DTAA provision.Apply Domestic tax rate or DTTA tax rate, whichever is beneficial – Sec 2(37A) (iii), One of the conduction for claiming Double Taxation relief is obtaining of Tax Residency Certificate (TRC) which is mentioned in Section 90(4) & als0 in 90(4)Sec 206AA to apply, If gross remittance amount is exceeding taxable limit then PAN no. is mandatory otherwise 20% deduction U/s 206AA apply.

Section 195 Implication

• 195(1) 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 provision 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 payments thereof in cash or by the issue of a cheque or draft or by other any mode, whichever is earlier, deduct income-tax thereon at the rate in force .

Sec.195(1)-scope and chargeability

• What is responsible to deduct tax?

• Who should the payee be?

• Status of non-resident ?

• Payments covered ?

• Point of deduction?• Rate of TDS ?

• Any person (As defined u/s 2(31)• All non resident whether having

presence in India or not• Does not include RNOR• Under sec.6• In case of duel residence if the

breaker clauses exists-DTAA is applied

• Any sum chargeable under the IT act• Except salaries and dividend u/s

1150• At the time of credit or payment

whichever is earlier• Relevant rate in force

Sec 195(1) –Scope and Chargeability

Particulars• Amount payables to non-resident

(net of tax)• Tax rate applicable• Gross–up income : 100*100/(100-

20)• Tax payable (INR 125*20%)• Net amount paid to non-resident

(INR 125-INR 25)

Amount• INR 100

• 20%• INR125

• INR 25• INR 100

Section 206AA Implications“206AA. Requirement to furnish

permanent Account no. -(1) Notwithstanding anything contained

in any other provisions of the act, any person entitled to receive any