15CA - 15CB Filing
Filing Forms 15CA and 15CB is a mandatory compliance step for making payments to non-residents. Form 15CA is the remitter’s declaration, while Form 15CB is a certificate issued by a Chartered Accountant (CA) that is required for certain taxable remittances to confirm tax compliance.
Mandatory non-resident payment.
CA certifies tax.
Ensures tax compliance.
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Foreign Remittance Compliance: A Guide to 15CA-15CB Filing
When making payments to a foreign entity or person, Indian residents must comply with specific provisions of the Income Tax Act, 1961. This includes filing Form 15CA and Form 15CB. These forms are crucial for ensuring that the correct taxes are deducted and reported before funds are remitted. Navigating the 15CA-15CB filing process can be complex, but FileMyFirm offers expert assistance to ensure your foreign remittance compliance is handled with ease.
Understanding Section 195 of the Income Tax Act
As per Section 195 of the Income Tax Act, 1961, any person or entity making a payment to a non-resident must deduct income tax at the applicable rate before making the payment. To track these transactions and ensure proper tax deduction, two key forms are required:
- Form 15CA: A declaration by the person making the payment, submitted to the tax authorities online.
- Form 15CB: A certificate issued by a Chartered Accountant (CA) to verify compliance with the Income Tax Act and any relevant Double Taxation Avoidance Agreement (DTAA).
Applicability of Form 15CA and Form 15CB
The requirement to file these forms depends on the nature and amount of the foreign remittance.
Form 15CA
Form 15CA is a mandatory online declaration for any person making a remittance to a non-resident. It is generally required regardless of whether the remittance is taxable in India.
Exemptions: Form 15CA is not required for a list of specified payments under Rule 37BB of the Income Tax Rules. It is also not required for an individual remitting an amount that does not exceed an aggregate of INR 5 lakh during the financial year, provided the remittance is not for a foreign tour or purchase of a foreign asset.
Form 15CB
Form 15CB is required when:
- The payment to a non-resident or foreign company is taxable in India.
- The payment exceeds INR 5,00,000.
- An order or certificate has not been obtained from the Assessing Officer regarding the tax rate.
Exemptions: Form 15CB is not required when the remittance is not taxable in India or when the aggregate of all remittances during the fiscal year does not exceed INR 5,00,000.
Structure and Details of the Forms
The forms are divided into parts based on the transaction value and compliance requirements.
- Form 15CA has four parts:
- Part A: For taxable remittances up to INR 5 lakh.
- Part B: For taxable remittances exceeding INR 5 lakh where an order from the Assessing Officer has been obtained.
- Part C: For taxable remittances exceeding INR 5 lakh where a certificate from a Chartered Accountant (Form 15CB) is required.
- Part D: For remittances that are not taxable under the Income Tax Act.
- Form 15CB has three parts: It details the nature of the remittance and includes the CA’s certification confirming that the provisions of the Income Tax Act and DTAA have been followed.
Penalties and Filing Procedure
A penalty of INR 10,000 per instance may be levied for not filing or for late filing of Form 15CA and 15CB.
Procedure for Filing:
- Determine Requirement: Assess whether the remittance is taxable and if a Form 15CB is required.
- Obtain CA Certification: If applicable, obtain CA certification for foreign remittance in Form 15CB from a qualified Chartered Accountant.
- File Online: The person making the remittance must file both Form 15CA and 15CB (if applicable) on the income tax department’s e-filing website.
- Acknowledgment: Upon successful submission, an acknowledgment is generated for future reference.
FileMyFirm can help you with the entire 15CA-15CB filing process, from preparation to submission, ensuring you remain compliant with all regulations.
Frequestly asked questions ( FAQ )
Forms 15CA and 15CB are compliance requirements for Indian residents (the remitter) making a payment to a non-resident or foreign company.
Purpose: The forms ensure that the remitter has complied with Section 195 of the Income Tax Act, 1961, which mandates the deduction of income tax (TDS) at the applicable rate before making a foreign remittance.
Role in Remittance: Banks and Authorized Dealers often require these forms before allowing the foreign currency to be transferred.
Form 15CA: This is a mandatory online declaration furnished by the person/entity making the remittance (the remitter) to the Income Tax Department.
Form 15CB: This is a certificate furnished by a Chartered Accountant (CA). It verifies that the remitter has correctly calculated the tax required to be deducted (TDS) as per the Income Tax Act and any relevant Double Taxation Avoidance Agreement (DTAA).
Form 15CB is generally mandatory when all of the following conditions are met:
The payment to the non-resident or foreign company is taxable in India.
The payment exceeds ₹5,00,000 (₹5 lakh) in the aggregate during the financial year.
The remitter has not obtained an order or certificate from the Assessing Officer regarding the tax rate.
Form 15CA Exemptions: The form is not required for a list of specified payments under Rule 37BB of the Income Tax Rules (e.g., certain imports, payments for foreign travel/credit cards up to a limit). It is also not required for an individual remitting an amount that does not exceed an aggregate of ₹5 lakh during the financial year, provided the remittance is not for a foreign tour or purchase of a foreign asset.
Form 15CB Exemptions: The CA certificate is not required when the remittance is not taxable in India, or when the aggregate amount of all remittances during the fiscal year does not exceed ₹5,00,000.
Form 15CA is divided into four parts based on the transaction value and compliance status:
Part A: For taxable remittances up to ₹5 lakh.
Part B: For taxable remittances over ₹5 lakh where an order from the Assessing Officer has been obtained.
Part C: For taxable remittances over ₹5 lakh where the CA certificate (Form 15CB) is required.
Part D: For remittances that are not taxable under the Income Tax Act.
Failure to file or late filing of Form 15CA and Form 15CB can result in a penalty of ₹10,000 per instance.