Examination of Payments made by individuals as rent to non-residents and applicability of Forms 15CA and 15CB therein

Karthik Natarajan – [2021] 131 taxmann.com 50 (Article)

Section 195 imposes a statutory obligation on any person (payer) paying rent to a non-resident to deduct income tax at the rates in force. Section 195 (6), as expanded in the Finance Act, 2015, states that ‘The person responsible for paying to a non-resident ….any sum, whether or not chargeable under the provisions of this Act, shall furnish the information relating to the payment of such sum, in such form and manner, as may be prescribed’.
In terms of Rule 37BB, the information for payment to a non-resident, not being a company, or to a foreign company is to be given in Form 15CA and 15CB.
In this article, the author has discussed the requirement of filing Form 15CA and 15CB by an individual for payment of rent to non-resident either as a direct foreign remittance or in the non-resident ordinary (NRO) account. The author has also discussed the grey areas requiring clarification by the income tax department.

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