Form 15CA and Form 15CB
Form 15CA is an online declaration filed by the remitter of a foreign payment to the Income Tax Department, and Form 15CB is a certificate issued by a Chartered Accountant confirming that the applicable taxes have been paid or deducted, together forming the compliance framework for overseas remittances under Section 195.
Section 195 of the Income Tax Act, 1961 requires any person making a payment to a non-resident or foreign company to deduct tax at source if the payment is chargeable to tax in India. The Form 15CA/15CB framework, operationalised through Rule 37BB of the Income Tax Rules, 1962, creates an audit trail for such foreign remittances and ensures pre-remittance tax compliance.
Form 15CA is an online form filed on the Income Tax portal by the remitter (payer in India) before making any foreign remittance subject to TDS. It comes in four parts: Part A for remittances up to Rs 5 lakh in a financial year where the remittance is taxable; Part B for remittances exceeding Rs 5 lakh covered by an order from the assessing officer; Part C for remittances exceeding Rs 5 lakh where Form 15CB has been obtained; and Part D for remittances that are not chargeable to tax in India.
Form 15CB is issued by a Chartered Accountant who certifies the nature of the remittance, applicable DTAA provisions, rate of tax deduction, and confirms that the income is chargeable to tax or that an applicable treaty exemption is available. This certificate is required for Parts B and C of Form 15CA and must be obtained before the form is submitted online.
Authorised dealer banks (the remitter's banker) are required to ensure that Form 15CA has been filed before executing the foreign payment. The bank obtains the unique acknowledgement number from Form 15CA as part of its documentation.
Rule 37BB prescribes specific categories of remittances that are exempt from the Form 15CA requirement, such as advances for imports, commission to agents abroad, remittances for travel, and education expenses, among others. These exemptions reduce administrative burden for routine commercial transactions.
For listed companies remitting payments to overseas subsidiaries, royalties, technical service fees, and inter-company loans, the 15CA/15CB process involves assessing the applicable withholding tax under domestic law and treaty provisions, which requires specialist tax advisory.