Form 145

15CA–15CB Filing – Compliance for Foreign Remittances

An Indian resident making a payment to a foreign entity must comply with the applicable provisions of the Income Tax Act, 1961. Forms 15CA and 15CB may need to be filed with the tax authorities before funds are remitted to a non-resident.

Filing Forms 15CA and 15CB involves the nature and value of the remittance, taxability in India, applicable tax rates, and relevant Double Taxation Avoidance Agreement provisions.

LegallensIndia assists remitters with preparing, certifying, and submitting Forms 15CA and 15CB.

Section 195 of the Income-tax Act, 1961

Section 195 provides that a person responsible for paying a non-resident, including a foreign company, must deduct income tax at the applicable rate before making the payment.

The remitter submits an undertaking in Form 15CA containing the payment details. For payments exceeding ₹5 lakh, the supplied content states that a Chartered Accountant's certificate in Form 15CB is required.

Form 15CB records the nature of payment, applicable tax rate, and tax deducted.

Importance of Forms 15CA and 15CB

Forms 15CA and 15CB support reporting of payments made by residents to non-residents under the Income Tax Act, 1961.

• Form 15CA: A declaration made by the person remitting the payment.
• Form 15CB: A Chartered Accountant's certificate confirming compliance with the Income Tax Act and the applicable Double Taxation Avoidance Agreement.
• The forms support timely reporting of non-resident payments.
• They also help ensure that applicable taxes are deducted and collected on time.

Form 15CA

Form 15CA is a declaration relating to a remittance made by an individual or company to a non-resident.

It is submitted online through the Income Tax Department website before the remittance is made.

The form enables the Department to track foreign remittances and review whether tax is being paid according to the Income Tax Act.

Form 15CB

Form 15CB is a certificate issued by a Chartered Accountant under Section 195(6) for payments to non-residents or foreign companies.

The certificate verifies whether the payment complies with the Income Tax Act and any applicable Double Taxation Avoidance Agreement between India and the foreign country.

Applicability of Form 15CA

• A person intends to remit money to a non-resident or foreign company, irrespective of whether the remittance is taxable.
• The remitter may be a resident, non-resident, domestic company, or foreign company.
• The declaration is required where income accrues, arises, is received, or is deemed to accrue, arise, or be received in India under Section 5.

Applicability of Form 15CB

• The certificate is filed by a Chartered Accountant when the remittance is made.
• The remittance to the non-resident or foreign company is taxable.
• The payment exceeds ₹5 lakh.
• No order or certificate has been obtained from the Assessing Officer.

When Form 15CA is Not Required

• The remittance appears in the specified payment list under Rule 37BB.
• The individual remitter does not require Reserve Bank of India approval under Section 5 of FEMA, 1999.
• The remittance is exempt from tax under the Income Tax Act or an applicable tax treaty.
• An individual's aggregate remittance during the financial year does not exceed ₹5 lakh and is not for a foreign tour or purchase of a foreign asset.
• An individual makes the remittance for education abroad and the amount does not exceed the limit prescribed by the RBI.

When Form 15CB is Not Required

• The remittance is not taxable in India.
• The remittee's country of residence treats the income as taxable and the remittance is sent to that country.
• Total remittances during the financial year do not exceed ₹5 lakh.
• An individual makes a remittance that is not for a foreign tour or purchase of a foreign asset and it remains within the RBI limit.
• An individual remits money for education abroad within the RBI limit.

Specified Payments Where Forms 15CA and 15CB Are Not Required

• Indian investment abroad.
• Advance payment against imports.
• Intermediary trade.
• Imports by diplomatic missions.
• Loans extended to non-residents.
• Imports below ₹5 lakh.
• Construction projects undertaken by Indian companies or firms, including goods imported at the project site.
• Freight insurance.
• Operating expenses of Indian airline firms.
• Travel under basic travel quota, pilgrimage, medical treatment, business travel, or education.
• Operating expenses of Indian shipping firms or companies operating abroad.
• Maintenance of offices outside India.
• Remittances by foreign embassies in India.
• Remittances by non-residents for family maintenance and savings.
• Donations and personal gifts.
• Donations to charitable and religious institutions abroad.
• Donations and grants to charitable institutions of foreign Governments and Governments themselves.
• Donations or contributions to international institutions.
• Refunds, reductions, or rebates in invoice value relating to exports.
• Payment or refund of taxes.
• Payments by residents for international bidding.

Parts of Form 15CA

Parts of Form 15CB

Penalty for Not Filing Forms 15CA and 15CB

The supplied content states that failure to file or delayed filing of Forms 15CA and 15CB can attract a penalty of ₹10,000 for each instance.

Details Required for Filing

• PAN: PAN of the remitter and beneficiary.
• Remittance Amount: Amount of the remittance stated in Indian rupees.
• Nature and Purpose: Details such as payment for services, royalty, or dividends.
• Tax Provisions: Relevant Income Tax Act sections and DTAA articles, where applicable.
• Bank Details: Bank name, branch, and account details of the remitter and beneficiary.
• CA Certificate: Where Form 15CB applies, the Chartered Accountant's name, membership number, certificate date, and remittance details.

Procedure for Filing Forms 15CA and 15CB

Step 1: Obtain a Valid PAN

The remitter should have a valid Permanent Account Number issued by the Income Tax Department.

Step 2: Determine Whether Form 15CB is Required

For a remittance exceeding ₹5 lakh, the supplied content requires a Chartered Accountant to certify in Form 15CB that the remittance is taxable in India and the appropriate tax has been paid.

Step 3: Complete Form 15CA

Enter the remitter, remittee, nature of remittance, and remittance amount on the Income Tax Department e-Filing website.

Step 4: Obtain CA Certification

Where Form 15CB applies, obtain the completed certificate from a Chartered Accountant.

Step 5: Submit the Forms

Upload the completed and certified Forms 15CA and 15CB through the Income Tax Department e-Filing website.

Step 6: Save the Acknowledgement

Retain the acknowledgement and its unique number after submission for future reference.

The filing procedure may differ depending on the transaction and other relevant factors.

How LegallensIndia Can Help

LegallensIndia assists with Form 15CA and Form 15CB from preparation to submission. Our experts help review the remittance information, applicable form parts, certification requirements, and supporting details.

Contact LegallensIndia for assistance with your foreign-remittance filing and compliance requirements..