CBDT Notification: Relaxation in Form 15CA/15CB Requirements for IFSC Units

The Central Board of Direct Taxes (CBDT) has introduced a significant relaxation in compliance requirements for units operating in International Financial Services Centres (IFSCs). Through a Notification dated 16th October 2023, the requirement to furnish Form 15CA and Form 15CB on a transactional basis has been eased for IFSC units making payments to non-residents (NRs) when such payments are not chargeable to tax under domestic laws.

Exemption from Form 15CA/15CB Filing

• IFSC units no longer need to furnish Form 15CA and Form 15CB for payments made to non-residents if such payments are not subject to tax under India’s domestic tax laws.
• This exemption simplifies compliance for IFSC units and enhances ease of doing business in these financial hubs.

Quarterly Reporting via Form 15CD

• While IFSC units are exempted from transactional filings of Form 15CA/15CB, they are required to submit a quarterly statement in Form 15CD.
• Form 15CD must include details of all remittances made to non-residents, where such remittances are not chargeable to tax under Indian laws.
• The due date for filing Form 15CD is within 15 days from the end of each quarter.

Effective Date

These amendments will come into effect from 1st January 2024.

Impact of the Amendment

• This move reduces the compliance burden for IFSC units, allowing them to focus on core financial activities without the need for repetitive filings.
• The introduction of Form 15CD ensures that tax authorities still receive necessary disclosures in a structured manner.
• It aligns with the government’s vision of making IFSCs a more attractive destination for global financial institutions by simplifying tax procedures.

For businesses operating in GIFT City and other IFSC zones, this change is a welcome step towards a more efficient and business-friendly tax regime.