CBDT Relaxes Rules Regarding Furnishing Of Information In Respect Of Payments Made To Non-Residents

The CBDT has issued a press release dated 17.12.2015 stating that section 195 of the Income-tax Act (‘the Act’) empowers the Central Board of Direct Taxes to capture information in respect of payments made to non-residents, whether chargeable to tax or not. Rule 37BB of the Income-tax Rules has been amended to strike a balance between reducing the burden of compliance and collection of information under section 195 of the Act


Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes

PRESS RELEASE

Dated: 17th December, 2015

Sub: Furnishing of information in respect of payments made to the non-resident-regarding.

Section 195 of the Income-tax Act (‘the Act’) empowers the Central Board of Direct Taxes to capture information in respect of payments made to non-residents, whether chargeable to tax or not. Rule 37BB of the Income-tax Rules has been amended to strike a balance between reducing the burden of compliance and collection of information under section 195 of the Act.

The significant changes under the amended Rules are:

– No Form 15CA and 15CB will be required to be furnished by an individual for remittance which do not requiring RBI approval under its Liberalised Remittance Scheme (LRS)

– Further the list of payments of specified nature mentioned in Rule 37 BB which do not require submission of Forms 15CA and 15CB has been expanded from 28 to 33 including payments for imports.

– A CA certificate in Form No. 15CB will be required to be furnished only in respect of such payments made to non-residents which are chargeable to tax and the amount of payment during the year exceeds Rs. 5 lakh.

The amended Rules will become applicable from 01.04.2016.

Notification No. G.S.R. 978(E) dated 16th December, 2015 is available on the website of the Department at www.incometax.gov.in.

(Shefali Shah)
Pr. Commissioner of Income Tax (OSD)
Official Spokesperson, CBDT


6 comments on “CBDT Relaxes Rules Regarding Furnishing Of Information In Respect Of Payments Made To Non-Residents
  1. bobjee Kurien says:

    The first line of the last para should read thus

    I feel that sanity should prevail to help the tax paying public by NOT interpreting the section technically by the officer

  2. The rules is force as on 1st day of the assessment year apply to the relative previous year. Hence, the notification is already effective. Yet, the website has not been changed for the amended forms.

  3. bhaskaran m p says:

    The instant clarification and the other recent announcements / notifications regarding revision of monetary limits for appeals, section 43B disallowance etc., are really welcome steps. It shows CBDT has been able to appreciate the practical difficulties / realities. Kudos to the Board.

    • Rajesh Bhardwaj says:

      Agreed Sir. The proactive approach of CBDT is highly appreciable. It should be kept up and become institutionalized so that tax payers problems brought to notice of CBDT are redressed in a time bound manner. Just one point. This tax payer friendly amendment in rule 37BB of income tax rules can be considered by CBDT for making applicable at the earliest ( say from 01.01.2016) instead of 01.04.2016.

      • Bobjee Kurien says:

        Another area which requires boards attention is the investment of sale proceeds in specified securities which are impractical.There are so many latches in the section. To cite a few investment in specified secuities which are not available at times then investment in house properties within a specified period . etc.there are so many issues that crop up in india. Take for instance an NRI .He comes for a shot period of time within that period he is required to either purchase bonds or a house property.At times these are not on sale at the time .he cannot take it back so he parks it in a bank.what option does he have. he needs to deposit in a capital gains account . he naturally follows the advice of the banks . later he finds a property to purchase .he enters into an agreement and pays part of it and pays the balance in installments. The section says the property needs to be constructed with in a specified period .Once he enters into an agreement he is at the mercy of the builder .the builder take his time and completes the residential unit in five years .Is he at fault. He has complied with the law but the technicality of not completing the construction denies him the benefit of exemption That is where the quasi judicial powers of the officer needs to be coming into play . Using that quasi judicial powers is price that the person has to pay for some one else’s default .There are so many instances where the construction is delayed and this denies the assessee the benefit of the exemption provisions of the act . In the recent judgment of a court it was held that the price agreed to at the time of agreement should be the value and not what is determined by the registration authorities.The purpose of conferring quasi judicial powers is for this purpose and that becomes encashment point for the officers .
        I feel that sanity should prevail to help the tax paying public by interpreting the section technically by the officers .When the person has committed to purchase a residential property and also parked the funds in a bank what is the problem of the assessing officer in allowing the exemption to the honest tax payer
        will the committee look into this aspect of the problem ?

        • bobjee kurien says:

          Error in typing.
          The first line in last para the word NOT was not typed read as under

          I feel that sanity should prevail to help the tax paying public by NOT interpreting the section technically by the officers

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