Form 15CA / 15CB are compliance requirements prescribed under the Income-tax Act for foreign remittances, and they apply only where the payment is chargeable to tax in India, subject to exemptions under Rule 37BB.
What these forms are
- Form 15CA: Declaration by remitter
- Form 15CB: Certificate by Chartered Accountant
They apply only to taxable remittances, subject to exceptions.
Statutory Background of Form 15CA and Form 15CB
Form 15CA and Form 15CB are procedural compliances linked to foreign remittances made outside India. They are not charging provisions. Their purpose is to ensure that payments chargeable to tax in India do not escape tax at the remittance stage.
Form 15CA is a declaration by the remitter, whereas Form 15CB is a certificate issued by a Chartered Accountant certifying the nature of payment and applicable tax provisions.
Why Form 15CA / 15CB Compliance Is Often Misunderstood
Form 15CA 15CB compliance is frequently misunderstood because banks and intermediaries tend to insist on these forms as a matter of routine, without examining the underlying taxability of the remittance. However, the legal requirement to furnish Form 15CA or obtain Form 15CB arises only when the payment is chargeable to tax in India under the Income-tax Act read with applicable DTAA provisions.
Over-compliance often results in unnecessary cost, delay, and professional exposure, especially where the remittance is clearly non-taxable. A clear understanding of the nature of payment, the chargeability provisions, and the scope of Rule 37BB is therefore essential before furnishing Form 15CA 15CB.
When Form 15CA / 15CB Is Required
Form 15CA 15CB is required where:
- A remittance is made to a non-resident or foreign company, and
- The remittance is chargeable to tax in India, and
- No exemption is available under Rule 37BB.
Depending on the nature and amount of remittance, different parts of Form 15CA (Part A, B, C, or D) apply.
When Form 15CA / 15CB Is NOT Required
Form 15CA 15CB is not required in the following situations:
- Remittances not chargeable to tax in India
- Payments covered under the specified exemption list in Rule 37BB
- Small value remittances within prescribed thresholds
- Certain personal remittances and routine transactions
Banks often insist on these forms mechanically, but legal requirement arises only where taxability exists.
Relationship Between Section 195 and Form 15CA / 15CB
Section 195 determines whether tax is deductible.
Form 15CA / 15CB determines how compliance is reported.
If a payment is not chargeable to tax under Section 195 read with DTAA, Form 15CA 15CB requirements may either not arise or apply in a limited manner.
Common Mistakes in Filing Form 15CA / 15CB
- Filing forms even when payment is not taxable
- Ignoring DTAA provisions
- Wrong selection of Form 15CA parts
- Treating Form 15CB as mandatory in all cases
- Filing based solely on bank insistence
These errors often lead to scrutiny, delay, or unnecessary exposure under Section 201.
Practical Compliance Checklist
Before filing Form 15CA / 15CB, ensure:
- Nature of payment is clearly identified
- Taxability under Section 9 examined
- DTAA article applied
- PE position evaluated
- Supporting agreements documented
Frequently Asked Questions
Is Form 15CB mandatory for every foreign remittance?
No. Form 15CB is required only in specified cases where remittance is chargeable to tax and exceeds prescribed thresholds.
Can Form 15CA be filed without Form 15CB?
Yes, depending on the nature and amount of remittance.
Does non-taxable remittance require Form 15CA?
In many cases, no, especially where covered by Rule 37BB exemptions.
Form 15CA / 15CB compliance should always be approached from a legal standpoint rather than as a routine banking formality, keeping in mind the underlying taxability of the remittance.
Conclusion
Form 15CA 15CB compliance must be driven by taxability, not by routine or bank pressure. A proper legal analysis avoids over-compliance and future litigation.
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