CBDT amends recently revised rules relating to furnishing information in respect of payments to nonresidents

The Central Board of Direct Taxes (CBDT), the apex administrative authority for direct taxes in India, has issued Notification No. 67/2013 (Notification) revising the existing Rule 37BB (Rule) of the Income Tax Rules 1962 which prescribes the manner and forms for furnishing information electronically by a person responsible for making any payment (Remitter) to a nonresident (NR or Recipient). This Notification is issued in suppression of an earlier notification 58/2013 dated 5 August 2013 which amended the Rule by providing a new manner and form of furnishing information.

The Notification mandates reporting of information in respect any payment made to a NR including interest, salary or any other sum chargeable to tax, in an amended format. The revised Rule shall come into force from 1 October 2013.

The Notification, while seeking to reduce compliance and administrative burden on taxpayers on certain categories of payments, also seeks enhanced reporting norms for certain other types of payments. The revised reporting is likely to enable more stringent withholding enforcement on cross-border payments. Taxpayers would need to review the Notification and assess the impact the same would have on their tax compliance obligations.

TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY PART II, SECTION 3, SUB-SECTION (ii) GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF REVENUE CENTRAL BOARD OF DIRECT TAXES NOTIFICATION NO. 67/2013 DATED 2-9-2013 In exercise of the powers conferred by sub-section (6) of section 195 and section 192, section 194B, section 194BB, section 194E, section 194LB, section 194LC, section 194LD, section 196B, section 196C, section 196D read with section 295 of the Income-tax Act, 1961 (43 of 1961) and in supersession of the notification of the Government of India in the Ministry of Finance, Department of Revenue, issued by the Central Board of Direct Taxes vide number S.O.2363(E) dated the 5th August, 2013 published in the Gazette of India, dated the 5th August, 2013, the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 1962, namely - nbsp 1. (1) These rules may be called the Income-tax (14th Amendment) Rules, 2013. nbsp (2) They shall come into force on the 1st day of October, 2013. 2. In the Income-tax Rules, 1962 (hereafter referred to as the said rules), for rule 37BB, the following rule shall be substituted, namely - nbsp ldquo Furnishing of information by the person responsible for making any payment including any interest or salary or any other sum chargeable to tax, to a non-resident, not being a company, or to a foreign company nbsp 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 - nbsp (i) 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 nbsp (ii) the information in Part B of Form No.15CA for payments other than the payments referred in clause (i) after obtaining- nbsp nbsp nbsp (a) a certificate in Form No.15CB from an accountant as defined in the Explanation below sub-section (2) of section 288 or nbsp nbsp nbsp (b) a certificate from the Assessing Officer under section 197 or nbsp nbsp nbsp (c) 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, lsquo authorised dealer rsquo 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). SPECIFIED LIST Sl. No. (1) Purpose code as per RBI (2) Nature of payment (3) 1 S0001 Indian investment abroad -in equity capital (shares) 2 S0002 Indian investment abroad -in debt securities 3 S0003 Indian investment abroad -in branches and wholly owned subsidiaries 4 S0004 Indian investment abroad -in subsidiaries and associates 5 S0005 Indian investment abroad -in real estate 6 S0011 Loans extended to Non-Residents 7 S0202 Payment for operating expenses of Indian shipping companies operating abroad. 8 S0208 Operating expenses of Indian Airlines companies operating abroad 9 S0212 Booking of passages abroad - Airlines companies 10 S0301 Remittance towards business travel. 11 S0302 Travel under basic travel quota (BTQ) 12 S0303 Travel for pilgrimage 13 S0304 Travel for medical treatment 14 S0305 Travel for education (including fees, hostel expenses etc.) 15 S0401 Postal services 16 S0501 Construction of projects abroad by Indian companies including import of goods at project site 17 S0602 Freight insurance - relating to import and export of goods 18 S1011 Payments for maintenance of offices abroad 19 S1201 Maintenance of Indian embassies abroad 20 S1202 Remittances by foreign embassies in India 21 S1301 Remittance by non-residents towards family maintenance and savings 22 S1302 Remittance towards personal gifts and donations 23 S1303 Remittance towards donations to religious and charitable institutions abroad 24 S1304 Remittance towards grants and donations to other governments and charitable institutions established by the governments. 25 S1305 Contributions or donations by the Government to international institutions 26 S1306 Remittance towards payment or refund of taxes. 27 S1501 Refunds or rebates or reduction in invoice value on account of exports 28 S1503 Payments by residents for international bidding rdquo . 3. In the said rules, in Appendix-II, for Form No.15CA and Form No.15CB, the following Forms shall be substituted, namely - Income-Tax Department ldquo FORM NO.15CA (See rule 37BB) Information to be furnished for payments, chargeable to tax, to a non-resident not being a company, or to a foreign company Ack. No. Part A (To be filled up if the remittance is chargeable to tax and does not exceed fifty thousand rupees and the aggregate of such remittances made during the financial year does not exceed two lakh fifty thousand rupees) REMITTER Name of Remitter PAN of the remitter (if available) TAN of the remitter (if available) Complete address, email and phone number of the remitter Status of remitter REMITTEE Name of recipient of remittance PAN of the recipient of remittance, if available Complete address, email and phone number of the recipient of remittance Country to which remittance is made REMITTANCE Amount payable before TDS (In Indian Currency) Aggregate amount of remittance made during the financial year including this proposed remittance Name of bank Name of the branch of the bank Proposed date of remittance Nature of remittance Tax deducted -- (a) Amount of tax deducted (b) Date of deduction VERIFICATION I/We , (full name in block letters), son/daughter of in the capacity of (designation) solemnly declare that the information given above is true to the best of my knowledge and belief and no relevant information has been concealed. I/We further undertake to submit the requisite documents for enabling the income-tax authorities to determine the nature and amount of income of the recipient of the above remittance as well as documents required for determining my liability under the Income-tax Act as a person responsible for deduction of tax at source. Place Date Signature Designation Delete whichever is riot applicable. 1. Write 1 if company, write 2 if firm, write 3 if individual and write 4 if others. 2. If the remittance is chargeable to tax, non-furnishing of PAN shall attract the provisions of section 206AA 3. If available 4. If available Part B (To be filled up if the remittance is chargeable to tax and exceeds fifty thousand rupees and the aggregate of such remittances made during the financial year exceeds two lakh fifty thousand rupees.) VERIFICATION 1. I/We , (full name in block letters), son/daughter of in the capacity of (designation) solemnly declare that the information given above is true to the best of my/our knowledge and belief and no relevant information has been concealed. 2. I/We certify that a certificate has been obtained from an accountant, particulars of which are given in this Form, certifying the amount, nature and correctness of deduction of tax at source./I/We certify that certificate/order under section 195(2)/195(3)/197 of the Income-tax Act, 1961, particulars of which are given in this Form . 3. In case where it is found that the tax actually deductible on the amount of remittance has not been deducted or after deduction has not been paid or not paid in full, I/We undertake to pay the amount of tax not deducted or not paid, as the case may be along with interest due. I/We shall also be subject to the provisions of penalty for the said default as per the provisions of the Income-tax Act, 1961. 4. I/We further undertake to submit the requisite documents for enabling the Income-tax Authorities to determine the nature and amount of income of the recipient of the above remittance as well as documents required for determining my/our liability under the Income-tax Act, 1961 as a person responsible for deduction of tax at source. 5. I/We further declare that I/we am/are furnishing this information in my/our capacity as and I/we am/are also competent to sign the return of income as per provisions of section 140 of the Income-tax Act, 1961 and verify it. Place Date Signature Designation Delete whichever is not applicable. For Office Use Only For Office Use Only Receipt No. Date Seal and Signature of Receiving Official i. In case TAN is applied for, please furnish acknowledgement number of the application. ii. Write 1 if company, Write 2 if firm, Write 3 if individual and Write 4 if others. iii In case of non-availability of PAN, provisions of section 206AA shall be applicable. iv Write 1 if company, Write 2 if firm, Write 3 if individual and Write 4 if others. v Accountant (other than an employee) shall have the same meaning as defined in the Explanation to Section 288 of Income-tax Act, 1961. vi Please fill the serial number as mentioned in the certificate of the accountant 1. To be signed and verified by an accountant (other than an employee) as defined in the Explanation below sub-section (2) of section 288 of the Income-tax Act, 1961. 2. Certificate number is an internal number to be given by the Accountant. Delete whichever is not applicable. rdquo . F.No.149/119/2012-SO(TPL) (J. Saravanan) Under Secretary of the Government of India Note The principal rules were published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (ii) vide notification number S.O. 969(E), dated the 26th March, 1962 and last amended by the Income-tax (13th Amendment) Rules, 2013, vide notification number S.O.2364(E), dated the 05.08.2013.....................