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Understanding Form 15CA and 15CB: Your Guide to Foreign Remittance Compliance
In today’s globally connected business landscape, cross-border payments have become routine for individuals and enterprises alike. However, these transactions are subject to tax scrutiny to ensure compliance with Indian tax laws. To monitor and regulate such foreign remittances, the Income Tax Department mandates the submission of Form 15CA and Form 15CB in specified cases.
These forms act as key instruments for tracking payments to non-residents and ensuring that the correct tax has been deducted at source (TDS), wherever applicable. Moreover, recent trends show that the department has been issuing notices under Section 133(6) and Section 148A based on the information declared in these forms—making it all the more important for taxpayers to understand and comply with the related provisions.
Legal Framework Governing Foreign Remittances
Two main legal provisions govern the compliance related to foreign remittances:
Section 195(6) of the Income Tax Act, 1961: Mandates that any person making a payment to a non-resident must furnish information about the transaction, regardless of whether it is taxable.
Rule 37BB of the Income Tax Rules, 1962: Details the procedure, forms, and exemptions applicable to such transactions.
What is Form 15CA?
Form 15CA is a declaration submitted by a resident remitter before sending any payment to a non-resident or foreign entity. The form is filed online with the Income Tax Department and must be submitted to the Authorized Dealer (generally the remitting bank) prior to initiating the remittance.
Purpose of Form 15CA
To ensure tax deduction at source (TDS) on payments made to non-residents, where applicable.
To provide transparency and traceability of foreign remittances.
To act as a compliance checkpoint before money leaves India.
Four Parts of Form 15CA
| Part | Applicability |
|---|---|
| Part A | Taxable remittance not exceeding ₹5 lakh in a financial year |
| Part B | Taxable remittance exceeding ₹5 lakh, and a certificate/order under Section 195(2), 195(3), or 197 is obtained |
| Part C | Taxable remittance exceeding ₹5 lakh, and a Form 15CB (CA certificate) is obtained |
| Part D | Remittance not chargeable to tax under the Income Tax Act |
What is Form 15CB?
Form 15CB is a certificate issued by a Chartered Accountant (CA), confirming that the proposed remittance complies with the provisions of the Income Tax Act and relevant Double Taxation Avoidance Agreements (DTAAs).
This form is mandatory before filing Part C of Form 15CA—when the remittance exceeds ₹5 lakh and is taxable.
Key Details in Form 15CB
Details of the remitter and beneficiary
Nature and purpose of the remittance
Currency and amount of remittance
Applicability of tax under Indian law
Relevant DTAA provisions, if any
Rate and amount of TDS deducted
When is Form 15CB Not Required?
You do not need Form 15CB if:
The remittance is not taxable under the Income Tax Act.
The remittance is ≤ ₹5 lakh during the financial year.
A lower/nil TDS certificate has been issued by the Assessing Officer.
Transactions Exempted from Filing Forms 15CA and 15CB
To reduce the compliance burden, Rule 37BB exempts certain transactions from the requirement to file Form 15CA/15CB.
No Filing Required For:
Remittances by individuals that do not require RBI approval
33 specified categories of transactions such as:
Imports of goods
Travel expenses
Tuition and education fees
Investments abroad
A complete list of exempted categories is available on the Income Tax Department’s website.
Filing Procedure for Form 15CA/15CB
Follow these steps to submit the forms:
Log in to the Income Tax e-Filing Portal.
Go to: e-File > Income Tax Forms > File Income Tax Forms.
Select the applicable form: 15CA or 15CB.
Fill in the relevant details and validate using Digital Signature Certificate (DSC) or Electronic Verification Code (EVC).
Submit the acknowledgment copy to your Authorized Dealer (Bank) before processing the remittance.
Penalties for Non-Compliance
Non-filing or incorrect filing of these forms can lead to:
Penalty under Section 271-I: ₹1,00,000 for failure to furnish Form 15CA/CB or for providing incorrect information.
Bank refusal to process the remittance in absence of proper documentation.
Practical Tips for Hassle-Free Compliance
Always consult a Chartered Accountant for high-value or complex remittances.
Maintain records such as invoices, agreements, and Tax Residency Certificates (TRC).
Use the latest utility and follow updated guidelines from the Income Tax portal.
In the evolving regulatory environment, understanding the compliance requirements related to foreign remittances is crucial. Filing Form 15CA and Form 15CB accurately helps avoid penalties, ensures smooth cross-border transactions, and keeps your tax affairs in order. When in doubt, seek professional advice to stay compliant and reduce the risk of scrutiny.
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