Form 15CA & 15CB: Foreign Remittance Compliance

When you send money abroad or make payments to a non-resident, the Indian tax law requires certain information to be furnished to the Income Tax Department before the remittance is made. Two key compliance forms for this purpose are Form 15CA and Form 15CB under the Income-tax Act. These help the tax authority track foreign remittances and ensure that tax obligations (including TDS under Section 195) are met before funds leave India. Form 15CA is a self-declaration of the payment, while Form 15CB is a certificate from a Chartered Accountant (CA) that verifies taxability, applicable TDS rates, and compliance with law and international tax treaties.

What is Form 15CA

Form 15CA is a declaration by the remitter (payer) who is a resident of India and intends to make a payment to a non-resident individual or foreign company. It must be filed online before making the remittance and contains details of the payment, the recipient, and confirmation that tax has been considered. It helps the Income Tax Department monitor foreign remittances and ensure proper tax deduction at source when required.

Parts of Form 15CA

Form 15CA has four parts based on the nature and amount of remittance:

• Part A: For remittances that are taxable but do not exceed ₹5 lakh in a financial year.
• Part B: When remittances exceed ₹5 lakh and an order/certificate under Section 195(2), 195(3), or 197 has been obtained from the Assessing Officer.
• Part C: When remittances exceed ₹5 lakh, a Form 15CB certificate from a CA has been obtained.
• Part D: For remittances that are not chargeable to tax under the Income-tax Act.

What is Form 15CB

Form 15CB is a Tax Determination Certificate prepared and certified by a Chartered Accountant (CA). It examines the nature of the remittance, the applicable TDS rate, and whether tax is required to be deducted under Indian law or the Double Taxation Avoidance Agreement (DTAA) with the recipient’s country. Form 15CB is usually required when the remittance to a non-resident exceeds ₹5 lakh in a financial year, unless a lower/nil withholding certificate from the Assessing Officer has been obtained.

Who must file these forms?

• Form 15CA: Any person responsible for sending a payment or remittance to a non-resident (individual or foreign company) must file this form before remittance under Rule 37BB of the Income-tax Rules. This applies whether the payment is taxable or not, unless specifically exempted by Rule 37BB.
• Form 15CB: A Chartered Accountant prepares and uploads this certificate when the remittance is taxable and exceeds ₹5 lakh in a financial year.

When these forms are required

• Form 15CA is needed for all remittances to non-residents that are reportable for tax tracking, unless the payment is covered by specified exemptions (like certain imports or RBI-exempted categories).
• Form 15CB is typically required only if the remittance is taxable and above ₹5 lakh for the year. It is not required for remittances below this threshold or where the remittance is not subject to tax in India.

Why these forms matter

The Income Tax Department uses Form 15CA to track foreign payments and ensure that tax is deducted where necessary. Form 15CB gives a professional certification that the tax treatment and withholding (TDS) are correct under Indian tax laws and any applicable tax treaties. Without these forms, authorised dealers (banks) may refuse to process the remittance, and the remitter could face penalties under tax provisions.

Step-by-Step: How to file online

Step 1: Log In

Go to the Income Tax e-Filing portal and log in with your credentials.

Step 2: Add or Assign CA (For Form 15CB)

For Form 15CB, invite your Chartered Accountant under the Authorized Partners section so they can file the certificate online.

Step 3: Select the Form

• Go to e-File > Income Tax Forms > File Income Tax Forms.
• Search for Form 15CA or Form 15CB, depending on what you need to file.

Step 4: Enter Required Details

• For Form 15CA, enter remitter and remittee details, remittance amount, purpose, tax details, and choose the correct part (A, B, C, or D).
• For Form 15CB, the CA will fill in the payment, tax rate, DTAA provisions, and TDS details.

Step 5: E-Verify and Submit

After completing the form, e-verify using your EVC or DSC. Once verified, an acknowledgement/ARN is generated.

Important Points and Exceptions

• Form 15CA is not always required when the remittance is by an individual not needing RBI approval or covered under specific exempt payment categories listed in Rule 37BB.
• Form 15CA can be withdrawn within 7 days of submission if needed.
• Not all remittances require Form 15CB; if the payment is non-taxable or below ₹5 lakh, CA certification may not be necessary.

Conclusion

Form 15CA and Form 15CB are critical compliance requirements when making foreign remittances or payments to non-residents under Indian tax law. Form 15CA serves as a declaration by the remitter, while Form 15CB is a CA’s certificate that confirms the correct tax treatment, TDS rates, and compliance with Section 195 of the Income-tax Act and DTAA provisions. Filing these forms correctly and on time helps ensure smooth processing of remittances, avoids bank rejections, and prevents penalties from the Income Tax Department.