🌐 FORM 15CA & 15CB – COMPLETE GUIDE

1️⃣ What is Form 15CA & 15CB?

Form 15CA

• Declaration of remittance made to a foreign entity by a resident of India.

• Purpose: Ensure TDS compliance on payments made outside India (under Section 195 of the Income Tax Act).

• Filed online on the Income Tax e-filing portal before remitting the payment abroad.

• Captures details of the remitter, recipient, amount, and TDS applicability.

Form 15CB

• Certificate from a Chartered Accountant (CA).

• Confirms:

  • Tax is properly deducted on the remittance (if applicable).

  • Remittance complies with Indian Tax Law.

• Mandatory for certain thresholds and types of payments.

• Signed by a Chartered Accountant and submitted along with Form 15CA.

2️⃣ Why Form 15CA & 15CB are Important

1. Ensures compliance with Section 195 of the Income Tax Act.

2. Enables remittance to foreign entities without penalty.

3. Provides proof to banks for remitting payments abroad.

4. Avoids legal action or interest/penalty from IT department.

3️⃣ Who Needs to File?

• Any resident of India making a payment to a non-resident / foreign entity, including:

  1. Salary to a non-resident employee

  2. Consultancy or professional fees

  3. Interest, royalty, technical fees

  4. Purchase of goods or services from abroad

  5. Dividend payments or commission abroad

• Form 15CB is required only if the remittance is chargeable to tax under Indian law.

• Form 15CA may still be required even if no TDS is applicable, depending on the remittance amount.

4️⃣ Thresholds for Form 15CA / 15CB

Form 15CA is divided into 4 parts:

Form 15CB is needed whenever the remittance is chargeable to tax.

5️⃣ Step-by-Step Process to File Form 15CA & 15CB

Step 1 – Determine Taxability

• Identify if remittance is taxable under Section 195.

• If taxable → TDS must be deducted before remittance.

Step 2 – Obtain Form 15CB

• Approach a Chartered Accountant.

• Provide details:

  • Remitter & recipient details

  • Nature & purpose of remittance

  • Amount and currency

  • TDS calculation & rate as per DTAA (if applicable)

• CA issues Form 15CB after verifying correctness.

Step 3 – File Form 15CA Online

• Go to Income Tax e-Filing portal → Services → Form 15CA.

• Enter:

  • PAN of remitter

  • Remittance details

  • TDS deducted (if applicable)

  • Attach Form 15CB (if required)

• Submit online. Generate Acknowledgment Number.

Step 4 – Bank Submission

• Provide Acknowledgment of Form 15CA & 15CB to your bank before initiating foreign remittance.

• Bank processes the remittance after verifying compliance.

6️⃣ Documents Required

7️⃣ Common Mistakes to Avoid

1. Filing incorrect part of Form 15CA

2. Missing Form 15CB when required

3. Incorrect TDS calculation

4. Not attaching Form 15CB to bank

5. Remitting without filing 15CA → may attract penalty

8️⃣ Penalty for Non-Compliance

• Failure to deduct TDS or non-filing:

  • Interest under Section 201(1A)

  • Penalty under Section 271C or 272A

• Reversal of remittance by bank if 15CA/CB not provided

Filing 15CA/CB ensures legal safety and smooth remittance.

9️⃣ Advisory Draft – Form 15CA & 15CB

To: [Client Name]
Date: __________

Subject: Advisory on Filing Form 15CA & 15CB for Remittance to Foreign Entity

Dear [Client Name],

This advisory provides guidance on compliance for remittance to foreign entities under Indian Income Tax laws.

Recommended Actions:

1. Determine taxability: Verify if the remittance is taxable under Section 195 of the Income Tax Act.

2. Engage a Chartered Accountant: Obtain Form 15CB certifying proper TDS deduction.

3. File Form 15CA online before remittance, attaching Form 15CB if required.

4. Provide acknowledgment to the bank to initiate remittance.

5. Maintain records of Form 15CA, 15CB, invoices, and bank details for future audits or queries.

Benefits: Ensures compliance, avoids penalties, smooth processing of foreign payments, and legal protection.

Warm regards,
[Consultant Name]
[Designation / Organization]

1️⃣0️⃣ Useful Links

• Income Tax e-Filing – Form 15CA: https://www.incometax.gov.in/iec/foportal

• TDS on Foreign Remittance – Section 195: https://www.incometaxindia.gov.in

🔹 ADDITIONAL INFORMATION ON FORM 15CA & 15CB

1️⃣ Types of Payments Requiring Form 15CA/15CB

While standard guides mention “foreign remittances,” specific payment types are often overlooked:

1. Technical fees / Royalty / Consulting services paid abroad

2. Commission or brokerage payments to foreign agents

3. Dividends or profit sharing to foreign shareholders

4. Loan repayments to non-residents

5. Purchase of software or intellectual property from foreign entities

6. Insurance or reinsurance premiums paid outside India

7. Scholarships / grants given to non-resident students or institutions

8. High-value gifts or donations to foreign entities

Every such transaction may require TDS calculation under Section 195 and proper filing of 15CA/CB.

2️⃣ Thresholds and Limits

• Form 15CA filing is mandatory for all remittances exceeding ₹5 lakh in some cases, even if TDS is not applicable.

• For low-value payments (<₹5 lakh) that are non-taxable, sometimes only Part A of Form 15CA is sufficient (no CA certificate needed).

• Banks may require 15CA acknowledgment for all remittances, even small amounts, depending on their internal policies.

3️⃣ Foreign Tax Residency Certificate (TRC)

• If the beneficiary is in a country with Double Tax Avoidance Agreement (DTAA) with India, you need a TRC.

• TRC helps reduce TDS rate under DTAA provisions.

• Must attach TRC with Form 15CB for the CA to certify correct tax treatment.

Example: Paying royalties to a US company may attract lower TDS (10%) under India-US DTAA, instead of 40% default.

4️⃣ Bank-Specific Guidelines

• Many banks require soft copies of Form 15CA & 15CB before processing foreign remittances.

• Some banks allow online submission of Form 15CA only after CA verification.

• It is recommended to submit well in advance (3–5 working days) to avoid remittance delays.

5️⃣ Validity of Form 15CA/15CB

• Form 15CA is valid only for the specific transaction mentioned.

• Cannot be reused for multiple payments unless clearly mentioned in submission.

• Form 15CB is issued per remittance, with CA certifying TDS calculation & DTAA applicability.

6️⃣ Penalties & Compliance Risks Not Always Highlighted

1. Incorrect filing of Form 15CA → Penalty under Section 271H: ₹10,000 per default.

2. Non-obtaining of Form 15CB → Remitter liable for TDS default.

3. Under-reporting of remittance amount → Interest and penalty under Section 201(1A) & 271C.

4. Mismatch with Form 26AS / TDS reporting → May trigger scrutiny from Income Tax Department.

Even if remittance is exempt from tax, non-filing of Form 15CA may attract penalties from banks or IT department.

7️⃣ Practical Tips for Businesses

1. Maintain remittance register with purpose, amount, recipient, and TDS status.

2. Collect invoices / contracts from foreign entities for verification.

3. Ensure TRC and declaration letters are available if claiming DTAA benefits.

4. File Form 15CA well before remittance to avoid delays.

5. Engage a qualified CA to certify Form 15CB for legal safety.

8️⃣ Situations Where Form 15CB May Not Be Required

• Payment to government / diplomatic missions

• Remittance for import of goods (not services) under certain thresholds

• Low-value non-taxable payments (as per Income Tax rules)

However, Form 15CA may still need to be filed, even if 15CB is not applicable.

9️⃣ Advisory Draft – Advanced Version

To: [Client Name]
Date: __________

Subject: Advisory on Form 15CA & 15CB – Foreign Remittance Compliance

Dear [Client Name],

This advisory covers detailed compliance guidance for remittances to foreign entities, including advanced scenarios and DTAA considerations.

Recommended Actions:

1. Determine TDS applicability: Identify if remittance is taxable under Section 195.

2. Engage CA for Form 15CB: Ensure TDS is calculated correctly, and DTAA benefits are applied.

3. File Form 15CA online in the correct part (A/B/C/D) before remittance.

4. Attach TRC if applicable to claim DTAA benefits.

5. Submit acknowledgment to bank before foreign payment.

6. Maintain all records for audit or IT scrutiny, including invoices, contracts, remittance registers, and Form 15CA/15CB.

7. For multiple payments, ensure separate forms or proper consolidation with CA certification.

Benefits: Compliance with Section 195, legal safety, smooth bank processing, avoidance of penalties, and correct TDS credit for recipients.

Warm regards,
[Consultant Name]
[Designation / Organization]

🔟 Useful Links

• Income Tax e-Filing Portal – Form 15CA

• Section 195 – TDS on payments to non-residents

• DTAA – Double Tax Avoidance Agreements