4 min
10-October-2024
When making payments to foreign entities or individuals from India, there are specific compliance requirements under the Income Tax Act. Two of the key forms used for reporting such foreign remittances are Form 15CA and Form 15CB. These forms ensure that taxes are correctly withheld at the source for foreign payments. In this article, we will explain what these forms are, their applicability, and how to file them, helping you understand the steps involved in making such transactions.
Form 15CA is submitted online through the income tax department's website, and it must be furnished before remitting the money abroad. Failure to submit this form can result in penalties. Importantly, the form is required even if no tax is deducted at source, as it still helps the government track such payments.
Form 15CB is generally required when remittance exceeds a certain threshold, and taxability of the transaction is in question. The form is prepared after reviewing various factors such as the nature of the payment, the tax residency status of the recipient, and whether DTAA benefits apply.
Step 1: Log in to the Income Tax Portal
Step 5: Verification and Submission
For Part D, which applies to non-taxable remittances:
Choose 'Form 15CB' and click "File Now."
What is Form 15CA?
Form 15CA is a declaration form used by individuals or businesses in India to report payments made to non-residents that are subject to Tax Deducted at Source (TDS). The form ensures that any taxes applicable to the foreign remittance are deducted before the payment is made. This process helps the Indian government track outward remittances and ensure compliance with tax laws.Form 15CA is submitted online through the income tax department's website, and it must be furnished before remitting the money abroad. Failure to submit this form can result in penalties. Importantly, the form is required even if no tax is deducted at source, as it still helps the government track such payments.
What is Form 15CB?
Form 15CB is a certification issued by a Chartered Accountant (CA) in cases where foreign remittances are made and TDS is applicable. The CA certifies the tax deduction and payment process. Form 15CB ensures that the withholding tax obligations on foreign payments have been accurately calculated as per the Double Taxation Avoidance Agreement (DTAA) between India and the country where the payment is being made.Form 15CB is generally required when remittance exceeds a certain threshold, and taxability of the transaction is in question. The form is prepared after reviewing various factors such as the nature of the payment, the tax residency status of the recipient, and whether DTAA benefits apply.
Form 15CA and Form 15CB applicability
Here are the key situations where Form 15CA and Form 15CB are applicable:- Foreign payments: When an Indian resident makes any payment to a non-resident entity or individual.
- TDS deduction: If TDS is applicable on the payment being made, both forms are required.
- Remittance above threshold: For remittances above a certain limit (generally Rs. 5 lakh), a CA certification (Form 15CB) is mandatory.
- Tax determination: Form 15CB helps in determining the taxability of a foreign transaction under Indian tax laws.
- Income tax compliance: These forms ensure that the tax on foreign remittances is deducted as per the provisions of the Income Tax Act, including provisions of the DTAA if applicable.
Form 15CA parts
Form 15CA is divided into four parts based on the remittance amount and the need for a CA certificate (Form 15CB). Here’s a breakdown of each part:Part of Form 15CA | When to Submit | Description |
Part A | When the total remittance is not more than Rs. 5 lakh and is chargeable to tax. | Applicable for remittances that are taxable and the amount is under Rs. 5 lakh. |
Part B | When the remittance exceeds Rs. 5 lakh and a certificate is obtained from the Assessing Officer under Section 197/195(2)/195(3). | Required if the remittance is over Rs. 5 lakh and an Assessing Officer’s certificate has been issued. |
Part C | When the remittance exceeds Rs. 5 lakh and is taxable under the Income Tax Act, and a certificate (Form 15CB) is obtained from a Chartered Accountant. | For remittances over Rs. 5 lakh, when certified by a CA in Form 15CB. |
Part D | When the remittance is covered under a specific exemption. | Applicable for exempt remittances as per the Income Tax Act. |
When is Form 15CA of Income Tax not required?
Form 15CA is not required in the following situations:- Non-taxable transactions: If the payment being made is not taxable under Indian tax laws, Form 15CA is not required.
- Payments specified in Rule 37BB: Certain types of payments like personal remittances for foreign travel, medical treatment, and education are exempt from the requirement of Form 15CA.
When is Form 15CB not required?
Form 15CB is not mandatory in the following cases:- Payments below Rs. 5 lakh: If the payment to a non-resident does not exceed Rs. 5 lakh in a financial year, Form 15CB is not required.
- Non-taxable transactions: If the remittance is not subject to tax in India, Form 15CB is not needed.
- Order or certificate obtained: If the taxpayer has received a certificate from the Assessing Officer under Section 195(2) or 195(3), Form 15CB is not necessary.
- Specified transactions under Rule 37BB: Payments for specific purposes such as gifts, donations, or maintenance of relatives are exempt.
How to file Form 15CA and 15CB online
A. Process to file Form 15CA - Part A, B, and D (online method)
Form 15CA is filed electronically on the Income Tax e-filing portal. It is verified using a digital signature or an electronic verification code (EVC). Below is the step-by-step guide for filing Form No. 15CA online.Step 1: Log in to the Income Tax Portal
- Visit the official income tax website
- Log in with your credentials.
- Go to the ‘Authorised Partners’ tab and select ‘My Chartered Accountant (CA)’.
- Click on ‘Add CA’ and enter the ‘Membership Number of the CA’.
- Confirm the request by clicking on ‘Add’. A message will display: "Request for adding CA has been submitted successfully and is pending for acceptance by the CA."
- Navigate to File Form 15CA:
- Go to the "E-file" section, then select 'Income Tax Forms' > ‘File Income Tax Forms’.
- Type ‘Form 15CA’ in the search box or select ‘Others (Source of Income not relevant)’ and choose Form No. 15CA.
- Start the Form Filing Process:
- On the ‘Instructions’ page, click ‘Let’s Get Started’.
- Select ‘Mode of Submission’ and the relevant Financial Year (FY).
- Choose the Appropriate Part:
- You need to select the applicable part from Part A, B, C, or D based on the nature of your remittance.
Part | Applicability | Details to Fill |
Part A | Applicable for remittances below Rs. 5 lakh during a financial year and is chargeable to tax. | Enter remitter (sender), remittee (recipient), and remittance details. No Form 15CB is required. |
Part B | Applicable when you have received an Assessing Officer (AO) approval under Section 195(2), 195(3), or 197. | Provide remitter, remittee, and remittance details along with AO Order details. No Form 15CB is required. |
Part C | For remittances exceeding Rs. 5 lakh during a financial year and requiring a Chartered Accountant’s certificate (Form 15CB). | Enter details of the remitter, remittee, remittance, and Chartered Accountant (CA) information. Attach Form 15CB. |
Part D | Applicable where remittance is not taxable under the Income Tax Act (ITA) and no withholding tax is required. | Provide remitter, remittee, and remittance details. Verify and submit the form. |
Step 5: Verification and Submission
- After filling in all the relevant details, click on ‘Preview’.
- Cross-check the details and e-Verify the form using a Digital Signature Certificate (DSC) or an Electronic Verification Code (EVC).
- Once verified, a confirmation message with a Transaction ID and Acknowledgement Number will appear. These details will also be sent to your registered email ID and mobile number.
- If applicable, after assigning the form to your CA, go to the ‘Dashboard’ and click on ‘Pending Actions’.
- Review Form 15CB, uploaded by your CA, and choose to ‘Accept’ or ‘Reject’.
- Once accepted, e-Verify the form. Upon successful submission, a ‘Submitted Successfully’ message will appear.
For Part D, which applies to non-taxable remittances:
- Enter details of the remitter (name, PAN, status, residential details, etc.).
- Provide details of the remittee and remittance.
- Verify the details, click on ‘Preview’, and then e-Verify the form using DSC or EVC.
- A confirmation message will be sent upon successful submission.
B. Process to file Form 15CB
To file Form 15CB, the first step is to complete the "Add CA" process.- Add Chartered Accountant (CA):
- Go to the "Authorised Partners" tab and select "My CA."
- Choose the "Add CA" option and enter the CA's membership number.
- Assign Form 15CB to the added CA.
- Filing Process:
Choose 'Form 15CB' and click "File Now."
- Filing Options:
- Manual Mode: Used for digitising forms manually filed between 7 June 2021 and 15 August 2021.
- Offline/Bulk Upload: This option requires generating the file using the Offline Utility.
- Online Submission: Fill in the required details directly in the online form, e-verify, and upload the CA’s digital signature (DSC).
- Submission: Once Form 15CB is successfully uploaded and submitted by the CA, it can be viewed and downloaded under the "E-file" tab by both the CA and the assessee.