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ARN. No. KLI/23-24/E-BB/1201
Features
Ref. No. KLI/22-23/E-BB/999
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.
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.
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.
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).
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.
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.
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:
To guide you through the process of filling and submitting Form 15CB online, follow these steps:
The procedure for offline or bulk filing of Form 15CA and 15CB is slightly different from each other.
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).
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:
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.
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.
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.
This part can be used for specific types of remittances that do not fall under the criteria of parts A, B, or C.
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.
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.
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 |
Here is the mandatory information you will need to fill out Form 15CA and 15CB for remittances to non-residents in India:
This can be filed online by the remitter on the Income Tax department’s e-filing website. You may also need details like:
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 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.
1
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
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
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
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
Form 15CA can be filed electronically on the Income Tax Department’s website. Form 15CB is prepared by a Chartered Accountant.
6
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
Form 15CA itself doesn’t have an expiry date. However, the information reported pertains to a specific remittance and financial year.
8
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
Yes, as mentioned earlier, neglecting to file these forms or providing inaccurate details can attract a penalty of up to ₹1 lakh.
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.
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
Pay 10,000/month for 10 years, Get 1,65,805/Year* for next 15 years.
ARN. No. KLI/23-24/E-BB/1201
Features
Ref. No. KLI/22-23/E-BB/999
The information herein is meant only for general reading purposes and the views being expressed only constitute opinions and therefore cannot be considered as guidelines, recommendations or as a professional guide for the readers. The content has been prepared on the basis of publicly available information, internally developed data and other sources believed to be reliable. Recipients of this information are advised to rely on their own analysis, interpretations & investigations. Readers are also advised to seek independent professional advice in order to arrive at an informed investment decision. Further customer is the advised to go through the sales brochure before conducting any sale. Above illustrations are only for understanding, it is not directly or indirectly related to the performance of any product or plans of Kotak Life.
