Introduction

International financial transactions have become very common in this globalized world and therefore ensuring compliance with tax regulations is essential. Form 15CA and 15CB filing is a vital compliance when an individual or business makes cross-border remittances from India. Indian Income Tax law requires the remitter to submit Form 15CA to certify that their remittance complies with Tax and FEMA laws, regardless of whether they are an individual or a corporate entity. Meanwhile, Form 15CB is issued by a qualified CA, clarifying that transactions meet all the applicable tax obligations. Whether you are an individual or business having an appropriate understanding on the key value of these forms ensure a hassle-free cross-border transaction and easily manage the compliance regulations. In this page, we will get an in-depth understanding on 15CA/CB including its applicability, lawful requirements, stepwise procedure and penalties for not filing the form.

What is 15CA & 15CB?

15CA is a declaration form filed for foreign remittance made outside India. It is furnished by the person responsible for making payments to a non-resident not being a company, or to a foreign company. It is filed at every remittance, before sending the amount. Meanwhile, 15CB is a certificate issued by a qualified CA (Chartered Accountant), indicating the tax has been accurately deducted and deposited as per the Income Tax law. It is required when payments are made to non-residents other than a company or foreign company and if the taxable payment exceeds 5 lakhs during the financial year. In form 15CB, CA certifies the details of taxes, TDS rates, and other remittance details. Both 15CA and 15CB can be filed in online and offline modes.

In Form 15CA, information of payout to non-residents is categorized into four main parts. As per the situation and case, the remitter needs to fill the relevant part. This below-mentioned table helps to clarify all the parts and their needs:

These forms are generally used in India for reporting payouts which are done to non-residents. Before the bank processes a foreign remittance, these forms ensure compliance with tax laws.

Applicability of 15CA/CB

The applicability of Form 15CA and 15CB is as follows:

To determine the applicability of forms first we need to check whether payments made to non residents are taxable in India as per section 5 of Income Tax Act.If yes, then we need to further check applicability of Part A, Part B or Part C of Form 15CA .

• Amount transferred is less than 5 lakhs in a financial year that case Form >15CA - Part A is required to be filed
• Amount transferred is more than 5 lakhs in a financial year Form 15CA - Part C is required to be filed. If Part C of Form 15CA is applicable in that case firstly 15CB is required to be filed mandatory.
• Amount transferred is more than 5 lakhs in a financial year and certificate from Assessing officer is obtained under section 195(2)/195 (3)/197 of the Income Tax in that case Form 15CA - Part B is required to be filed

In case payment or remittance to non resident is not taxable in India and covered in the exception list in that case Form 15CA-Part-D is required to be filed irrespective of the amount of remittance .

Exemptions in 15CA/CB filing

Form 15CA/15CB is related to the Foreign Exchange Management Act (FEMA), and there are some exemptions where it may not be required to file. Here are some common exemptions:

1. Indian equity capital invested outside/abroad
2. Indian debt security invested outside
3. Indian investment overseas through fully owned subsidiaries and branches
4. Indian investment abroad - in real estate
5. Loan given to non-resident
6. Advance payment against import
7. Payout for invoice import-settlement
8. Import by diplomatic mission
9. Intermediary trading
10. Import under Rs. 5,00,000
11. Maintenance cost of Indian Airlines companies operating abroad
12. Remittance towards business travel
13. Travel under BTQ (Basic Travel Quota)
14. Pilgrimage Travel
15. Traveling for medical treatment
16. Travel for education (including fees, hostel expenses, etc.)
17. Postal Services Construction of projects abroad by Indian companies including import of goods at the project site
18. Freight insurance - relating to import and export of goods
19. Travel for education training and courses (including fees, hostel expenses, etc.)
20. Postal Services
21. Indian Companies building projects overseas, including bringing materials to the project site
22. Freight insurance - relating to import and export of goods
23. Payments abroad for office maintenance
24. Payment abroad for Maintenance of Indian embassies
25. Remittances by foreign embassies in India
26. Remittance by non-residents towards family maintenance and savings
27. Remittance towards personal gifts and donations
28. Remittance towards donations to religious and charitable institutions abroad
29. Donations and grants to other governments or charitable institutions established by governments
30. Contributions or Charity to international institutions by the Government
31. Remittance towards payment or refund of taxes
32. Any reduction, rebates, or refunds in invoice value on account of exports
33. Payout by residents for international bidding

Required details for 15CA/CB filing

Below details are required to fill the form:

• Invoice/ Agreements against which payment is going
• Certificate of Tax Residency (if availing DTAA benefits)
• No-PE Declaration (if applicable) [A declaration indicating no Permanent Establishment exists in India.]
• PAN of Remittee (if available)
• RBI Approval (if required)
• Digital Signature Certificate (DSC)
• Form 10F (if applicable for DTAA benefit) [Form 10F is a statement confirming an individual or company’s eligibility to pursue tax advantages.]
• Bank Statement (to verify remittance amount)
• Nature and Amount of Payment (Currency in which payment made)
• Remitter and Remittee details (Name and complete Address)
• Board Resolution approving the remittance (Required in case of Company/LLP)
• Partnership Deed/LLP Agreement/Trust Deed/MOA (as applicable)

Stepwise Procedure for filing

The complete stepwise procedure for filing the Form 15CA/CB is as follows:

Step 1: Obtaining a PAN

Initially, the taxpayer who files the Form 15CA must ensure they have a PAN (Permanent Account Number) issued by the Income tax Department of India. If the taxpayer doesn’t have the PAN, they need to apply for that first.

Step 2: Determine Whether 15CB is Required

Form 15CB must be filed if the remittance exceeds Rs.5 lakh and is chargeable to tax. Chartered Accountants (CAs) certify this form, confirming that the remittance is taxable in India and that the appropriate taxes have been paid, ensuring compliance with Indian tax regulations. If you have this requirement, you must obtain CA certification before filing the Form 15CA.

• CA must register on the e-filing portal as Chartered Accountant.
• PAN status must be active.
• Must possess a valid DSC (Digital Signature Certificate) - it should not be expired.
• Taxpayers must have assigned Form 15CB’s Part-C to the CA.

After these prerequisites, there will be six sections of Form 15CB that should be filled before submitting the form. These are as follow:

1. Certification: The Certification page is the page where the accountant provides certification information.
2. Details of Remittee (Recipient): In the Remittee (Recipient) Details page, the details/profile of the recipient is updated and displayed.
3. Details of Remittance (Fund Transfer): In the Remittance (Fund transfer) Details page, the remittance amount and the bank details are updated and displayed.
4. Taxability under the income tax Act (without DTAA): In this section, you need to select Yes/No for the "Is remittance chargeable to tax in India?" field.
5. Taxability under the income tax act (with DTAA relief): Here you have to give the income details, if DTAA relief is applicable.
6. Details of Accountant: Provide details of Accountant such as - Accountant Name, Firm, Membership ID and Address.

After obtaining a 15CB certificate (in specific cases), again login for the Form 15CA.

Step 3: Fill Out the Form 15CA

Visit the Income Tax e-filing portal and file the Form 15CA according to your applicability:

• Part A: When the amount is up to Rs. 5,00,000 and not taxable
• Part B: When the amount is more than Rs. 5,00,000 with a certificate under section 195(2)/197.
• Part C: When the amount is more than Rs. 5,00,000 with Form 15CB
• Part D: When the amount is not taxable according to Indian Law.

Step 4: Complete Documentations

Fill in the required details and information of the remitter and remittee and ensure that all the information is accurate and well-structured. At the end, the remittee will get an acknowledgment where they will receive a unique number, confirming that the form is submitted correctly.

Penalties for not filing 15CA/CB

Section 271-I of the Income Tax Act, 1961 imposes a penalty for non-compliance with Form 15CA and Form 15CB. As a penalty for non-filing or incorrect filing of Form 15CA and 15CB, Rs 1 lakh or the remittance amount is payable.

Fees for 15CA and 15CB

At Bizfoc, we provide expert guidance under minimum charges such as:

These charges may vary as per the complexity, service provider, and the transactions. Trust on Bizfoc for getting 15CB certificate in just 24hrs.

Why Bizfoc?

Bizfoc is an expert team of qualified CAs who excel in handling Form 15CA and 15CB filing by providing professional guidance through the complete procedure. We ensure compliance with the Indian Tax Law and FEMA regulations, managing the certification and Form 15CB submission by a qualified CA (Chartered Accountant) and accurately completing the Form 15CA for remittances. Connect with us for more comprehensive tax requirements and its professional approach.

Conclusion

Managing international remittances and adhering to Indian tax and foreign exchange regulations require compliance with Form 15CA and 15CB. By accurately completing these forms and obtaining certifications, you can make remittances seamless and lawful. It is important to follow the outlined steps and consult with professional advisers when necessary when dealing with taxable payments or exemptions to avoid pitfalls and ensure regulatory compliance. Bizfoc's expertise in managing these processes provides a reliable solution for both individuals and businesses. It provides the required assurance to know that all documentation is in place, and remittances are being well remitted.

Frequently Asked Questions