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Form 15CA and Form 15CB - Everything You Need to Know

Form 15CA and 15CB are essential for declaring foreign settlements and non-resident entities or Foreign Companies subject to taxation, especially exceeding ₹5 Lakh annually.

  • 1,656 Views | Updated on: Jun 26, 2024

Foreign settlement within India’s taxation framework demands clarity and precision. Central to this process are two essential forms: Form 15CA and 15CB. Mandated by the Income Tax Act, 1961, Form 15CA and 15CB serve as vital tools for ensuring compliance and transparency in cross-border transactions.

Key Takeaways

  • Form 15CA is crucial for the declaration of foreign remittances, ensuring compliance with the Income Tax Act.
  • It is mandatory for any person/entity making remittances to non-resident or foreign companies.
  • It should be filed online before remittance, and exemptions are available for certain categories.
  • Form 15CB is essential for payments exceeding ₹5 Lakh within a fiscal year, validated by a Chartered Accountant.
  • It is not needed for non-taxable remittances in India or if the recipient’s country taxes the income.

As a responsible taxpayer, it is essential that you have proper knowledge of Form 15CA and 15CB so that you do not face any complications in the taxing procedure. Let us understand what is the big deal about Form 15CA and 15CB and how Form 15CA and 15CB work.

What is Form 15CA?

Form 15CA is a crucial declaration required for any person making foreign remittances outside of India. It ensures compliance with the provisions of the Income Tax Act, 1961. It is a way for the government to monitor and regulate foreign remittances for tax purposes.

Any person or entity making a remittance to a non-resident or a foreign company should submit Form 15CA. This form is filed online before the remittance is made. However, certain categories of remittances are exempt from this requirement or have lower withholding tax rates, as specified by the Income Tax Act or Double Taxation Avoidance Agreements (DTAA).

What is Form 15CB?

Form 15CB is essential for payments directed to Non-Resident entities, excluding companies, or to Foreign Companies that are subject to taxation, particularly if the payment exceeds ₹5 Lakh within a fiscal year. It operates on an event-based basis, necessitating its completion for each qualifying remittance. Within Form 15CB, a Chartered Accountant validates payment details, TDS rates, deductions, and specifics regarding the nature and purpose of the remittance.

How to File e-Form 15CA And 15CB online?

If you want to fill Form 15CA and 15CB, you have to choose whether you want to fill Form 15CA and 15CB online or offline. Here are the separate steps for Form 15CA and 15CB.

Form 15CA

To fill out Form 15CA, you can use the online and offline modes with greater access to the internet, people prefer online filing. Online filing can be done through the e-filing Portal, follow these steps:

  • Step 1. Log in to the e-Filing portal using your user ID and password.
  • Step 2. Once logged in, navigate to your Dashboard, then click on e-File > Income Tax Forms > File Income Tax Forms.
  • Step 3. On the File Income Tax Forms page, locate and select Form 15CA. Alternatively, you can directly search for Form 15CA in the provided search box.
  • Step 4. Proceed by clicking Let’s Get Started on the Instructions page.
  • Step 5. Upon clicking Let’s Get Started, Form 15CA will be displayed. Choose the appropriate section and complete all required details. Then, click Proceed.
  • Step 6. Verify the details on the Preview page and proceed to e-Verify by clicking on the respective button.
  • Step 7. Confirm your intent to submit by clicking Yes.
  • Step 8. You will then be directed to the e-Verify page, where you can complete the verification process.

Form 15CB

To guide you through the process of filling and submitting Form 15CB online, follow these steps:

  • Step 1. Log in to the e-filing portal using valid CA credentials.
  • Step 2. Once logged in, navigate to your Dashboard, then click on e-File > Income Tax Forms > File Income Tax Forms.
  • Step 3. On the File Income Tax Forms page, locate and select Form 15CB. Alternatively, you can directly search for Form 15CB in the provided search box.
  • Step 4. After selecting Form 15CB, specify the Submission Mode as Online, choose the relevant financial year, and proceed by clicking Continue.
  • Step 5. On the Instructions page, click Let’s Get Started.
  • Step 6. Before proceeding to fill in the details, input the PAN of the taxpayer who has delegated the form to the CA, and then click Proceed. In case the PAN of the Taxpayer is not linked with Aadhaar, the CA will receive a notification indicating that the PAN is inoperative due to the lack of Aadhaar linkage.
  • Step 7. Continue by clicking on the Continue button to begin filling out the Form.
  • Step 8. Fill in all the required details, and once done, click Preview.
  • Step 9. On the Preview page, click Proceed to e-Verify and confirm your intent to submit by clicking Yes.
  • Step 10. Enter the Unique Document Identification Number on the Unique Document Identification Number page, select the checkbox, and then click Proceed.
  • Step 11. You will then be directed to the e-Verify page, where you can electronically verify the form using a Digital Signature Certificate (DSC).

Procedure to File Form 15CA and 15CB Offline/ Bulk Mode

The procedure for offline or bulk filing of Form 15CA and 15CB is slightly different from each other.

Filing Form 15CA:

  • Log in to the e-Filing portal and navigate to “e-File” > “Income Tax Forms” > “File Form 15CA”.
  • Enter basic details such as PAN/TAN (auto-populated), financial year, filing type, and submission mode (“Offline/Bulk”).
  • Download the Form 15CA Offline Utility from the “Downloads” section on the Income Tax Forms page.
  • Prepare individual XML files for the Remitter, Remittee, and CA (only for Part-C). Zip all the XML files.
  • For Part C, import the Form 15CB XML submitted by your CA (accessible from View e-Filed Forms).
  • Upload the zipped file and submit it, receiving a Token Number.
  • Check the submission status by visiting “e-File” > “View Form 15CA Offline/Bulk”. Verify if XMLs were successful (Acknowledgement Number generated) or failed (reasons provided).
  • In case of failure, correct the XML with necessary validations/data and re-upload.

Filing Form 15CB:

  • Access the e-Filing portal and navigate to “e-File” > “File Form 15CB”.
  • Enter essential details like User ID, PAN, submission mode (“Offline/Bulk”), and financial year.
  • Download the Form 15CB Offline Utility from either the provided link or the “Downloads” section on the Income Tax Forms page.
  • Prepare individual XML files for the Remitter, Remittee, and CA, then compress them into a zip file.
  • Upload the zipped file and submit using your Digital Signature Certificate (DSC), receiving a Token Number.
  • Monitor submission status by visiting “e-File” > “View Form 15CB Offline/Bulk”. Confirm if XMLs were successful (Acknowledgement Number generated) or failed (reasons provided).
  • In case of failure, re-upload the corrected XML with the necessary fixes.
  • You can download a PDF of successful submissions and an export file showing the ARN number, status, and XML filename for failed files.

Applicability of Form 15CA and Form 15CB

Form 15CA and 15CB are essential for foreign remittances as per the Income Tax Act 1961. Let us see what is the applicability of Form 15CA and 15CB.

Form 15C: It applies to payments made to non-resident individuals or foreign companies, regardless of whether taxation applies to the remittance. The remitter may be an individual, resident or non-resident, or a company, domestic or foreign. As per the guidelines outlined in Section 5 of the Income Tax Act, 1961, whenever income arises, accrues, is received, or is deemed to arise or be received in India, Form 15CA declaration is necessary.

Form 15CB: For the remittance process, a Chartered Accountant (CA) must file Form 15CB. This form becomes necessary when the remittance to a non-resident or foreign company is subject to taxation when the remittance surpasses ₹5 lakh, and when there’s no directive from the Assessing Officer (AO).

4 Parts of Form 15CA

Form 15CA is used to declare tax on remittances made to non-residents. The form itself has four parts, each applicable depending on the amount and tax situation of the remittance:

Part A

This is the simplest part and requires details like remitter and remittee information, along with remittance details. You can see this part when the remittance is taxable and the total amount for the financial year is 5 lakh rupees or less.

Part B

When the remittance is taxable and the total amount for the financial year exceeds 5 lakh rupees, this part can be used. Additionally, you need to have an order/certificate obtained from the Assessing Officer (AO) under sections 195(2)/195(3)/197 of the Income Tax Act. This part requires details like remitter, remittee, AO order details, and remittance information.

Part C

In this case, you will need a certificate in Form 15CB from a Chartered Accountant (CA). Use this part when the remittance is taxable and the total amount for the financial year exceeds 5 lakh rupees. This part requires remittee and remittance details, along with the CA’s information and relevant attachments.

Part D

This part can be used for specific types of remittances that do not fall under the criteria of parts A, B, or C.

When is Form 15CA not necessary?

Form 15CA is not necessary for remittances conducted in accordance with the designated payment categories outlined in Rule 37BB of the Income Tax Rules. In cases where the remitter does not need prior RBI approval as per Section 5 of the Foreign Exchange Management Act (FEMA), 1999, Form 15CA is not required.

When is Form 15CB not necessary?

Form 15CB is not needed for non-taxable remittances in India. If the recipient’s country taxes the income and the remittance is sent there, Form 15CB is not necessary. It is not required if only “Part-A” of Form 15CA is filled, i.e., for payments under ₹5 Lakhs annually.

When an individual makes a remittance not for foreign travel or asset purchase, and the amount does not exceed RBI’s prescribed limit, Form 15CB is not needed. Also if a certificate from the Assessing Officer under sections 197 or 195(2) / (3) has been obtained Form 15CB is not necessary.

List of Payments Where Form 15CA / 15CB is Not Required Form 15CA And Form 15CB

There can be some instances where Form 15CA and 15CB are not needed. Here is the list of payments that do not require Form 15CA and 15CB:

Purpose code as per RBI

Nature of Payment

S0001

Indian investment abroad -in equity capital (shares)

S0002

Indian investment abroad -in debt securities

S0003

Indian investment abroad -in branches and wholly owned subsidiaries

S0004

Indian investment abroad -in subsidiaries and associates

S0005

Indian investment abroad -in real estate

S0011

Loans extended to Non-Residents

S0202

Payment- for operating expenses of Indian shipping companies operating abroad.

S0208

Operating expenses of Indian airline companies operating abroad

S0212

Booking of passages abroad -Airline companies

S0301

Remittance towards business travel.

S0302

Travel under basic travel quota (BTQ)

S0303

Travel for pilgrimage

S0304

Travel for medical treatment

S0305

Travel for education (including fees, hostel expenses etc.)

S0401

Postal services

S0501

Construction of projects abroad by Indian companies including import of goods at project site

S0602

Freight insurance – relating to import and export of goods

S1011

Payments for maintenance of offices abroad

S1201

Maintenance of Indian embassies abroad

S1202

Remittances by foreign embassies in India

S1301

Remittance by non-residents toward family maintenance and savings

S1302

Remittance towards personal gifts and donations

S1303

Remittance towards donations to religious and charitable institutions abroad

S1304

Remittance towards grants and donations to other Governments and charitable institutions established by the Governments.

S1305

Contributions or donations by the Government to international institutions

S1306

Remittance towards payment or refund of taxes.

S1501

Refunds or rebates or reduction in invoice value on account of exports

S1503

Payments by residents for international bidding

What is the Mandatory Information Required to Fill Form 15CA and 15CB?

Here is the mandatory information you will need to fill out Form 15CA and 15CB for remittances to non-residents in India:

For Both Form 15CA and 15CB

  • PAN Details: You will need the Permanent Account Number (PAN) of both the remitter (person making the payment) and the remittee (person receiving the payment).
  • Remittance Details: Specify the amount of the remittance in Indian Rupees (₹).
  • Nature of Remittance: Clearly state the reason for the remittance, such as payment for services, royalty, or dividends.

Depending on the Form

Form 15CA

This can be filed online by the remitter on the Income Tax department’s e-filing website. You may also need details like:

  • Remitter Information: Name, contact details, and address.
  • Remittee Information: Name, address, and tax residency certificate (from the remittee’s country).
  • Verification: Verification of the person submitting the form (usually through a digital signature certificate).

Form 15CB

This form requires certification from a Chartered Accountant (CA) if the remittance amount exceeds ₹5 lakhs. The CA will certify that the remittance is taxable in India and the appropriate taxes have been deducted. You may need to provide supporting documents like:

  • Form 10F: Duly filled and signed by the authorized person of the remittee.
  • Tax Residency Certificate: From the remittee (verifying their tax registration in their country).
  • Certificate of No Permanent Establishment (PE) in India: A document from the remittee confirming they don’t have a permanent establishment in India.

Conclusion

Form 15CA and 15CB are the pillars of accountability and efficiency in the field of foreign remittances, offering a structured framework for both taxpayers and regulatory bodies alike. By following the prescribed guidelines for filing Form 15CA and 15CB and understanding the exemptions outlined within the Income Tax Act, individuals and entities can explore the complexities of international transactions. Having proper knowledge of Form 15CA and 15CB will contribute to a seamless ecosystem of economic exchange while upholding regulatory integrity.

Frequently Asked Questions about Form 15CA and Form 15CB

1

What is the significance of Form 15CA and 15CB?

These forms are crucial for reporting payments made to non-residents by Indian residents. Form 15CA acts as a declaration by the payer about the remittance, while Form 15CB (obtained from a Chartered Accountant) ensures compliance with tax regulations and Double Taxation Avoidance Agreements (DTAAs).

2

Is Form 15CB obligatory for all transactions?

No, it’s not mandatory for all transactions. Form 15CB is only required for taxable payments exceeding ₹5 lakh to non-residents during a financial year.

3

Who is responsible for filing Form 15CB?

The resident making the remittance is not responsible for filing Form 15CB directly. They need to get a Chartered Accountant (CA) to certify the details and tax deducted (if applicable) on Form 15CB.

4

What happens if Form 15CA and 15CB are not filed?

Failure to file these forms can lead to a penalty of up to ₹1 lakh, even if inaccurate information is furnished in the filed forms.

5

How can I obtain Form 15CA and Form 15CB?

Form 15CA can be filed electronically on the Income Tax Department’s website. Form 15CB is prepared by a Chartered Accountant.

6

Is it necessary to furnish Form 15CB before completing Form 15CA?

No, for transactions where Form 15CB isn’t required, you can complete Form 15CA first. However, if Form 15CB is applicable, you’ll need the CA’s certificate details while filing Form 15CA.

7

How long is Form 15CA valid for?

Form 15CA itself doesn’t have an expiry date. However, the information reported pertains to a specific remittance and financial year.

8

Can Form 15CA and Form 15CB be revised or withdrawn?

There’s no provision for revising or withdrawing these forms once submitted. However, you can file a rectification request if you discover any errors in the filed information.

9

Are there any consequences for non-compliance with Form 15CA and Form 15CB?

Yes, as mentioned earlier, neglecting to file these forms or providing inaccurate details can attract a penalty of up to ₹1 lakh.

- A Consumer Education Initiative series by Kotak Life

Amit Raje
Written By :
Amit Raje

Amit Raje is an experienced marketer who has worked in various Fintechs and leading Financial companies in India. With focused experience in Digital, Amit has pioneered multiple digital commerce in India. Now, close to two decades later, he is the vice president and head of the D2C business department. He masters the skill of strategic management, also being certified in it from IIMA. He has challenged his challenges and contributed his efforts in this journey of digital transformation.

Amit Raje
Reviewed By :
Prasad Pimple

Prasad Pimple has a decade-long experience in the Life insurance sector and as EVP, Kotak Life heads Digital Business. He is responsible for developing user friendly product journeys, creating consumer awareness and helping consumers in identifying need for life insurance solutions. He has 20+ years of experience in creating and building business verticals across Insurance, Telecom and Banking sectors

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