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Form 15CA and 15CB Filing: Ensure Compliance for Foreign Remittances
If you are sending money abroad from India, you need to comply with tax regulations to avoid unnecessary hassles. The Income Tax Department has mandated the filing of Forms 15CA and 15CB for certain foreign remittances to track transactions and ensure proper tax deductions. The Form 15CA is a declaration that confirms whether tax applies to your transfer, and Form 15CB is a certification from a Chartered Accountant used to verify the tax details. Filing these correctly can be confusing and time-consuming, and if done incorrectly, it could lead to penalties or delays.
What is Form 15CA?
Form 15CA is a declaration form required under Section 195 of the Income Tax Act of 1961. It is filed by any resident who makes payments to non-residents or foreign companies. The primary purpose of Form 15CA is to ensure that the appropriate Tax Deducted at Source (TDS) is calculated and deducted on the payment being made. Form 15CA is subdivided into four parts, A, B, C, and D, which are as follows:
- PART A: The remittance or the aggregate of such remittance does not exceed ₹5 lakhs during the financial year.
- PART B: Where remittance or the aggregate of such remittances exceeds ₹5 lakhs during the financial year and an order/certificate u/s 195(2) / 195(3) / 197 of the Income Tax Act, 1961 has been obtained from the Assessing Officer.
- PART C: The remittance or the aggregate of such remittance exceeded ₹5 lakh rupees during the financial year, and an accountant has obtained a certificate in Form No. 15CB.
- PART D: The remittance is not taxable under the Income Tax Act of 1961.
What is Form 15CB?
Form 15CB is a certificate issued by a Chartered Accountant (CA) in India. This certificate is essential in confirming that the TDS deducted on a payment to a non-resident complies with the provisions of the Income Tax Act, 1961, and any applicable Double Taxation Avoidance Agreements (DTAAs). Form 15CB is the CA’s verification of Form 15CA. For any remittances exceeding INR 5 lakh during a financial year, the CA has to prepare and certify Form 15CB before the remitter can file Part C of Form 15CA.
Who Needs to File Form 15CA and 15CB?
The following individuals and entities are required to file Form 15CA and 15CB:
- Resident Individuals who make any payment for services, royalties, interest, etc. to a non-resident.
- Domestic Companies (Public Limited and Private Limited) that remit payments to non-resident individuals or foreign companies.
- Partnership firms and LLPs where a resident partner is responsible for making payments to a non-resident.
- Non-Resident Entities (in some cases): Foreign companies making certain remittances through an Indian representative may also need to comply.
When is Form 15CA Applicable?
Form 15CA must be filed in the following scenarios:
- Foreign Remittance for Taxable Payments: Any payment to a non-resident or foreign company that is chargeable to tax in India.
- Declaration of TDS Deduction: Required even if the remittance is not subject to TDS, as a declaration to the Income Tax Department that the funds are being transferred.
When is Form 15CA Not Required?
According to Rule 37BB of the Income Tax Rules:
- Low-Value Remittances: When the aggregate remittance does not exceed INR 5 lakh and is not taxable.
- Exempted Transactions: There are a total of 33 types of payments where before outward remittance, the approval of RBI is not required. These include transactions for travel, medical treatment, postal services, and more.
When is Form 15CB Applicable?
Form 15CB is required only in specific cases, such as:
- Taxable Remittances Exceeding INR 5 Lakh: If your aggregate remittance in a financial year exceeds ₹5 lakhs and is taxable in India.
- Absence of AO Order: When you have not obtained a certificate from the Assessing Officer under sections 195(2), 195(3), or 197 of the Income Tax Act, 1961.
- For Remittances Requiring CA Certification: When the remittance details need independent verification to confirm that TDS has been correctly deducted.
When is Form 15CB Not Required?
Form 15CB is not required in the following situations:
- Non-Taxable Payments: If the payment is not taxable in India.
- Payments Below the Threshold: Remittances below ₹5 lakhs where only Part A of Form 15CA is required.
- Specific Exemptions: When a certificate from the Assessing Officer (AO) under section 197 or sections 195(2)/(3) has already been obtained, reducing the need for CA certification.
- Payments Already Covered by DTAA: If the remittance is taxed in the recipient’s country as per DTAA provisions.
Documents Required to File Form 15CA and 15CB
Filing Forms 15CA and 15CB is essential for remitting funds abroad from India. To ensure a smooth and compliant filing process, the following documents are required:
For Form 15CA
- Remitter’s Information: Full name, address, PAN (Permanent Account Number), TAN (Tax Deduction and Collection Account Number) (if applicable), Digital Signature Certificate (DSC) or Electronic Verification Code (EVC) information, contact details (email, phone number), and Bank Account details (bank name, branch name, and BSR code).
- Remittee (Beneficiary) Information: Full name and complete postal address, Country of residence, and Tax Residency Certificate (TRC) (if claiming benefits under a Double Taxation Avoidance Agreement - DTAA).
- Purpose and Nature of the Remittance: A clear description of the remittance's purpose (e.g., payment for services, royalty, dividend).
- Amount of Remittance: The total amount being remitted, both in INR and the relevant foreign currency, if applicable.
- Proposed Date of Remittance: The date on which the remittance is planned to be sent.
For Form 15CB
- Chartered Accountant’s Certificate: The certificate should include the CA’s name, membership number (as issued by ICAI), and firm details, along with the CA’s address and contact information. The certificate should verify that TDS has been correctly deducted as per the Income Tax Act and DTAA.
- Supporting Documents:
- Invoice or agreement detailing the nature of the payment.
- Tax Residency Certificate (TRC) of the remittee (if applicable).
- Form 10F (if required) – a declaration by the remittee about their tax residency status.
- Any relevant approval certificate from the Assessing Officer (for Part B of Form 15CA).
By ensuring all required documents are correctly gathered and submitted, you can streamline the process of filing Form 15CA and 15CB, avoiding delays or issues with tax compliance.
Step-by-Step Process for Filing Form 15CA and 15CB Online
Filing Form 15CA and Form 15CB is an essential process for remitting funds abroad from India. Below is a detailed step-by-step guide on how to file these forms online:
Form 15CA Filing Online
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STEP 1: Log In to the E-Filing Portal
Visit the official Income Tax e-filing portal and log in with your PAN, user ID, and password. From the dashboard, click on the “e-File” tab and select “Income Tax Forms.” Then click on “File Income Tax Forms” and choose Form 15CA under ‘Others (Source of Income not relevant)’.
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STEP 2: Select the Correct Part of Form 15CA
Based on the amount and type of remittance, choose the appropriate part:
- Part A if the remittance is below INR 5 lakh.
- Part B if the remittance exceeds INR 5 lakh and you have an AO order.
- Part C if the remittance exceeds INR 5 lakh and requires a CA’s certificate (Form 15CB).
- Part D if the payment is not taxable.
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STEP 3: Fill in the Details of the Remitter and Remittee
Provide the necessary details for both the sender (remitter) and recipient (remittee), including names, addresses, PAN numbers, bank account details, BSR codes, and IFSC codes.
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STEP 4: Specify the Purpose of Remittance
Indicate the purpose of the remittance (such as payment for services, royalties, interest), along with the amount (both in INR and foreign currency, if applicable), and the proposed date of remittance.
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STEP 5: Verification
Verify the accuracy of all details provided. Proceed to e-verify the form using either a Digital Signature Certificate (DSC) or Electronic Verification Code (EVC).
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STEP 6: Submit the Form
After verification, submit the form. An acknowledgment with a distinct Transaction ID and Acknowledgement Number will be provided upon successful submission.
Form 15CB Filing Online
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STEP 1: Chartered Accountant’s Role
Before filing Form 15CB, ensure your Chartered Accountant (CA) is added as an authorized partner for the filing process.
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STEP 2: CA Login
The CA must log into the e-filing portal using their credentials, select “File Income Tax Forms,” and then choose Form 15CB from the list.
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STEP 3: Enter the Required Details
The CA must fill in the remitter’s PAN details, the remittance amount, and other relevant information. The CA will also need to certify that the TDS deducted is correct and that the remittance complies with the Income Tax Act and any applicable Double Taxation Avoidance Agreements (DTAAs).
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STEP 4: Upload XML File (For Offline/Bulk Filing)
If filing offline or in bulk, the CA should download the utility to prepare an XML file with the necessary details. The XML file should be zipped and uploaded to the portal along with the Digital Signature File (DSC).
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STEP 5: E-Verification
The CA must electronically verify the form using their DSC. After successful verification, the form is submitted online, and an acknowledgment is generated.
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STEP 6: Provide Acknowledgement Receipt Number (ARN)
The remitter will need to use the ARN generated from Form 15CB when filing Part C of Form 15CA.
Why Choose Kanakkupillai?
Filing Form 15CA and 15CB involves multiple steps and comprehensive documentation. Missing any key details can delay the process. Kanakkupillai ensures the smooth filing of these forms with the following benefits:
- Expert Guidance: Our team of tax professionals offers in-depth knowledge of income tax regulations and international remittance procedures to guide you step-by-step.
- Time and Cost Efficiency: We understand the importance of time, and our efficient process minimizes disruptions to your business operations while saving valuable resources.
- Submission Without Errors: We ensure all details, from PAN and TAN numbers to remittance information, are accurate and comply with the latest standards to avoid fines and delays.
- Coordination with Certified Chartered Accountants: We work with certified CAs who specialize in Form 15CB certification, ensuring the precise preparation and submission of the CA certificate.
- Compliance Administration: Our services include continuous monitoring, follow-up with the Income Tax Department, and proactive resolution of any issues that may arise.
With Kanakkupillai, you can rest assured that your Form 15CA and 15CB filings will be completed accurately and efficiently, keeping your business compliant with tax regulations.
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