Form 15CA and 15CB: Remitting Money Abroad Correctly

Every outward remittance from India passes a tax checkpoint before it passes the bank. The purpose is straightforward: to establish whether tax should have been withheld, and if so, that it was. Form 15CA is the remitter's declaration; Form 15CB is a chartered accountant's certificate supporting it.

The structure

Form 15CA has four parts, and choosing the wrong one is the most common reason a remittance is held up.

• Part A — the remittance is chargeable to tax and the aggregate for the financial year does not exceed ₹5 lakh. No 15CB needed.
• Part B — chargeable to tax, above that threshold, and an order or certificate from the Assessing Officer has been obtained.
• Part C — chargeable to tax, above the threshold, supported by a Form 15CB from a chartered accountant. This is the usual route.
• Part D — not chargeable to tax under the Act. No 15CB needed.

A specified list of remittances is exempt from 15CA altogether, largely personal and government-related categories. Ordinary business payments are not on it.

What Form 15CB actually certifies

The certificate is a considered opinion on the taxability of the payment. Reaching it requires:

• The nature of the payment — royalty, fees for technical services, interest, business income, reimbursement of cost.
• The treaty position, where the recipient is resident in a country India has a DTAA with, and whether treaty relief reduces or removes the withholding.
• Where treaty benefit is claimed, a valid Tax Residency Certificate and Form 10F from the recipient.
• Whether the recipient has a permanent establishment in India, which changes the answer entirely.
• The rate applied, including the higher rate that applies where the recipient has no PAN.

That analysis is the substance of the exercise. The form is only where the conclusion gets recorded.

A workable sequence

1. Classify the payment by nature, from the contract and the invoice — not from the vendor's description of it.
2. Collect the TRC, Form 10F and a no-PE declaration where treaty relief is claimed.
3. Determine the withholding rate and deposit the TDS where applicable.
4. Obtain Form 15CB.
5. File Form 15CA, quoting the 15CB acknowledgement.
6. Give the bank the forms along with the A2 documentation.

Practical points

• Get the documents before the payment falls due. A missing Form 10F is the single most frequent cause of a stalled remittance.
• Reimbursement of actual cost without a mark-up is often not chargeable — but that position needs documenting, not asserting.
• A TRC has a validity period. Check the dates; an expired certificate supports nothing.
• Equalisation levy or withholding on digital services can apply to payments that look like ordinary software or advertising spend. Check before treating them as not chargeable.
• Keep the certificate, the treaty analysis and the supporting declarations together. Remittances get examined years later, and the file is the defence.

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Planning an overseas payment and unsure of the withholding? Talk to Kunal P Shah & Co.