Change of Procerss-Foriegn Remittance-online Submission of Form A2
Ther are major changes in rules relating to furnishing of Information in respect of payment to the Non -Resident with effect from 01.04.2016.
For remittances abroad, you might be required to furnish information in the four forms:
1. Form A2 (Required as per FEMA)
2. Application cum Declaration for purchase of foreign exchange under LRS (Required as per FEMA)
3. Form 15 CA (Required as per Income Tax Act)
4. Form 15 CB (Required as per Income Tax Act)
Your remittances to non-residents abroad will be governed by FEMA (Foreign Exchange Management Act). Additionally, the authorized dealer banks need to ensure that your remittance is in compliance with the Income Tax laws i.e. tax has been duly paid on the funds being remitted and TDS, if any has been deducted.
Further, Remittances under LRS do not require RBI approval. RBI has delegated the power to Authorized dealer banks. Authorized dealer bank has to satisfy itself that the remittance/drawal of foreign currency is not in contravention of FEMA or Income Tax Act.
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For compliance with FEMA, it may rely on Form A2 and declaration under LRS.
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For compliance with Income Tax Act, it will rely on Form 15 CA and Form 15 CB, if required.
Earlier, Form A2 was submitted manually with the Authorized dealer bank along with other requisite documents. Now, it will be submitted online along with
applicable purpose code (Refer the attached Circular for code list).
Changes in Furnishing Form A2 for Foreign Remittances w.e.f. 01.04.2016:
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Authorized dealer banks, offering internet banking facility to their customers allow online submission of Form A2 (Application for Remittance Abroad) and also enable uploading/submission of documents, if any. Therefore it is mandatory to file online Form A2.The application cum declaration for purchase of foreign exchange under the Liberalized Remittance Scheme (LRS) of USD 250,000 has been clubbed with Form A2.Form A2 will be submitted to the Authorized dealer bank mentioning the Purpose Code for the remittance.
For Reference RBI Circular has been attached here with.
