Foreign remittances from India are regulated to ensure tax compliance, especially under Section 195 of the Income Tax Act. Two key forms—15CA and 15CB—play a crucial role in this process. Here’s a streamlined guide to help you understand when and how to use them.
What is Form 15CA?
Form 15CA is an online declaration of foreign remittance made by a resident to a non-resident. It helps the Income Tax Department monitor taxable foreign payments.
Parts of Form 15CA:
Part A – Remittance ≤ ₹5 lakh in a financial year; taxable.
Part B – Remittance backed by a certificate/order under Sec. 195(2), 195(3), or 197, regardless of amount.
Part C – Remittance > ₹5 lakh and taxable; Form 15CB required.
Part D – Remittance not chargeable to tax under Indian law.
What is Form 15CB?
Form 15CB is a certificate issued by a Chartered Accountant. It confirms that tax has been correctly deducted (if applicable) on a foreign remittance exceeding ₹5 lakh and not covered by exemptions or AO certificates.
When Are These Required?
Form 15CB is mandatory for:
– Remittances > ₹5 lakh
– Taxable payments not supported by a lower/nil deduction certificate
Form 15CA must be filed in all cases, unless the remittance falls under exempt categories (as per Rule 37BB).
Filing Process (Simplified)
1. Check applicability of tax and thresholds
2. Obtain Form 15CB (if required) from CA
3. Fill and file Form 15CA on the income tax portal
4. Submit both forms to the remitting bank
Common Errors to Avoid
– Using the wrong part of Form 15CA
– Mismatched details between Form 15CA & 15CB
– Filing Form 15CA before obtaining Form 15CB
– Ignoring exempted transaction categories
Non-Compliance = Penalty
– Penalty of ₹1 lakh under Section 271-I
– Remittance may be delayed or rejected by banks
Quick Compliance Tips
– Maintain clear documentation
– Work closely with your CA
– Monitor remittance limits
– Stay updated with Rule 37BB and RBI guidelines
Conclusion
Understanding and filing Forms 15CA and 15CB correctly ensures seamless foreign remittances and tax compliance. When in doubt, consult a Chartered Accountant to avoid penalties and delays.
