Form 15CA and Form 15CB

What is Form 15CA?³
 

Form 15CA is a declaration by an individual or entity (remitter) making a payment to a non-resident (not being a company) or foreign company. The remitter needs to mandatorily submit (online or offline) this to the Income Tax Department before remitting the amount. It serves as a mechanism to track foreign remittances and ensure tax compliance.

Applicability of Form 15CA³
 

Form 15CA is typically applicable for the following payment conditions:

• Payments made to non-residents that are taxable in India
• Required for certain categories of payments unless exempt (per Rule 37BB).

However, form 15CA submitted can be withdrawn within 7 days of submission. Remitters are not required to file Form 15CA in case of remittances that do not require prior RBI (Reserve Bank of India) approval, and the nature of the remittance is specified under a specific purpose code as per RBI.

Parts of Form 15CA³

Form 15CA is divided into four parts, each catering to different scenarios:

 

What is Form 15CB?⁴
 

Form 15CB is a certificate issued by a Chartered Accountant (CA) to validate the taxability of a foreign remittance. When an individual or entity in India remits money exceeding INR 5 lakhs in a financial year to a non-resident or a foreign company and the remittance is taxable in India, in that case, form 15CB obtained from CA has to be furnished to the Income Tax Department. It ensures that the payment complies with the provisions of the Indian Income Tax Act, 1961. The purpose of the form is to certify the nature and taxability of the remittance.
 

Applicability of Form 15CB⁴
 

Form 15CB is typically applicable in the following payments:

• Form 15CB is required for payments made to non-residents (excluding companies) or foreign companies that are taxable and
• When the foreign remittance exceeds the total of INR 5 lakh in a financial year.
• It is an event-based form, needed for each remittance that meets these conditions.

However, the remitter is not required to file form 15 CB if the remittance is listed under Rule 37BB as exempt.
 

Sections in Form 15CB⁴
 

Form 15 CB has six sections that certify the following details as issued by the Chartered Accountant:
 

 

Why are Form 15CA and Form 15CB Important?⁵

Submission of forms 15CA and 15CB is important for the following reasons:

• It ensures transparency in foreign remittances.
• It helps in preventing tax evasion.
• Enables tax compliance
• Regulate the flow of funds outside the country by ensuring that all foreign payments are levied accurate taxes
• Ensures cross-border transactions are documented appropriately.
• Certificate of CA is an additional level of accuracy to reduce non-compliance or non-reporting of funds.
   

How to File Form 15CA?²

 

Filing Form 15CA online is a straightforward process involving some simple steps:

• Visit the official e-filing portal of the Income Tax Department. Log in with your user ID and password.
• Navigate to "e-File" > "Income Tax Forms" > File Income Tax Forms.
• On the page of ‘’File Income Tax Forms’’, choose Form 15CA and get started
• Select the applicable part (A, B, C, or D) based on the remittance amount and taxability.
• Enter all the relevant details in the chosen section. This includes remitter, remittee, remittance amount, purpose, taxability, and applicable DTAA provisions.
• Proceed to e-verify using a Digital Signature Certificate (DSC) or Aadhaar-based OTP.
• Submit the form and download the acknowledgement for your records.
   

How to File Form 15CB?⁴
 

Filing Form 15CB requires the certification from the Chartered Accountant (CA):

• The remitter needs to assign Form 15CB to a Chartered Accountant and provide all the necessary documents for certification. This includes invoices, agreements, and tax residency certificates.
• The CA has to log into logs in to the Income Tax e-filing portal with valid CA credentials.
• Navigate to "e-File" > "Income Tax Forms" > File Income Tax Forms> Form 15CB
• The CA fills in the details of remittance, taxability, and applicable DTAA relief.
• The CA e-verifies and certifies the form before uploading it to the portal
• The remitter can download the certificate for use in filing Form 15CA
   

Conclusion

To sum up, Form 15CA and 15CB are indispensable tools for regulating foreign remittances in India. They help individuals and entities in tax compliance ensure transparency and seamless process in cross-border remittance. While Form 15CA acts as a declaration by the remitter providing all the details of remittance, Form 15CB provides an expert certification by a Chartered Accountant. Both forms ensure the seamless flow of information to the Income Tax Department. Understanding and adhering to the requirements of these forms is essential for all remitters to stay compliant.