Form 15CA & 15CB: Foreign Remittance Compliance Guide

Any business or individual making a payment to a non-resident or foreign entity must comply with the Form 15CA and 15CB requirements under the Income Tax Act. These forms are the tax department's mechanism to track foreign remittances and ensure that applicable taxes are deducted before money leaves India.

Non-compliance can result in the bank refusing to process the remittance, penalties, and scrutiny from the Income Tax Department.

Form 15CA is an online declaration filed by the remitter (the person making the payment) on the Income Tax portal. It declares the nature of the remittance, the applicable tax treaty provisions, and whether tax has been deducted.

Form 15CB is a certificate issued by a Chartered Accountant that certifies the nature of the remittance, the applicable DTAA provisions, and the tax deducted at source. It is required before filing certain parts of Form 15CA.

Form 15CA/15CB requirements depend on the nature and amount of the remittance:

Required when the remittance does not exceed ₹5 lakh in a financial year and is taxable in India. No Form 15CB required.

Required when the remittance exceeds ₹5 lakh and an order or certificate has been obtained from the Assessing Officer under Section 195(2), 195(3), or 197. Form 15CB not required.

Required when the remittance exceeds ₹5 lakh and is taxable in India, and no order/certificate has been obtained from the AO. Form 15CB from a CA is mandatory before filing Part C.

Required for remittances that are not taxable in India (e.g., covered by DTAA exemption, or listed in Rule 37BB exempt list). No Form 15CB required.

Rule 37BB of the Income Tax Rules lists 33 categories of remittances that do not require Form 15CA/15CB. Common exemptions include:

• Import of goods (covered by customs documentation)
• Remittances by individuals for personal travel, education, medical treatment (up to LRS limits)
• Salary paid to non-resident employees
• Remittances under diplomatic privileges
• Payments for shipping and air freight

Important: Even for exempt remittances, banks may ask for a declaration. Keep documentation ready.

Assess whether the remittance is taxable in India under the Income Tax Act and the applicable Double Taxation Avoidance Agreement (DTAA). This requires analysis of:

• Nature of payment (royalty, FTS, dividend, interest, business income, etc.)
• Residential status of the recipient
• Applicable DTAA provisions
• Permanent Establishment (PE) considerations

If the remittance exceeds ₹5 lakh and is taxable, engage a Chartered Accountant to issue Form 15CB. The CA will:

• Verify the nature of the remittance
• Determine the applicable DTAA provisions
• Confirm the TDS rate and amount deducted
• Issue the certificate with their digital signature

1. Log in to incometax.gov.in with your PAN credentials
2. Go to e-File → Income Tax Forms → File Income Tax Forms → Form 15CA
3. Select the applicable Part (A, B, C, or D)
4. For Part C: enter the acknowledgement number of Form 15CB issued by your CA
5. Fill in remitter and recipient details, remittance amount, currency, and bank details
6. Submit using DSC or EVC

Provide the Form 15CA acknowledgement number to your bank along with the remittance instruction. For Part C remittances, also provide the Form 15CB certificate.

Banks are required to report all foreign remittances to the RBI and Income Tax Department.

When making taxable payments to non-residents, you must deduct TDS under Section 195 at the applicable rate:

DTAA provisions may reduce these rates significantly. For example, India's DTAA with Singapore caps royalties at 10% and FTS at 10%.

Many businesses deduct TDS at the higher domestic rate without checking if a DTAA provides a lower rate. Always verify the applicable DTAA and obtain a Tax Residency Certificate (TRC) from the recipient.

Selecting the wrong Part (A, B, C, or D) is a common error. The correct Part depends on the amount, taxability, and whether an AO order exists.

Form 15CA must be filed before the remittance is made. Banks will not process the payment without the acknowledgement number.

For remittances exceeding ₹5 lakh that are taxable, Form 15CB is mandatory. Proceeding without it is a compliance violation.

Under-deduction of TDS makes the remitter liable for the shortfall plus interest and penalty. Over-deduction creates refund complications for the non-resident.

Our international taxation team handles end-to-end Form 15CA/15CB compliance:

• Taxability analysis and DTAA review
• Form 15CB certification by our qualified CAs
• Form 15CA filing on the income tax portal
• TDS computation and deposit
• Coordination with your bank for smooth remittance processing

Contact us at [email protected] or WhatsApp +91 92172 31472.

Disclaimer: This article is for informational purposes only and does not constitute legal or tax advice. Consult a qualified CA for advice specific to your situation.