15CA - 15CB Filing

February 17, 2025 by Team Instabizfilings

What are 15CA and 15CB?

In India, the 15CA and 15CB forms are essential compliance tools under the Income Tax Act, 1961 for individuals or entities making payments to non-residents. These forms are specifically designed to ensure that payments made to non-resident individuals or entities are in compliance with Indian tax laws, especially concerning the tax deducted at source (TDS).

Form 15CA is a declaration form that needs to be filed by the person making payments to non-residents. Form 15CB is a certificate issued by a Chartered Accountant (CA) that certifies that the applicable tax has been paid on the amount being remitted to a non-resident or that no tax is due under the provisions of the Income Tax Act.

Who Should File 15CA and 15CB?

Both 15CA and 15CB are required when any payment is made to a non-resident (including a foreign company or an individual) that is subject to tax in India under Section 195 of the Income Tax Act. Here’s who needs to file:

Residents Making Payments to Non-Residents: Any Indian resident making payments such as royalties, fees for technical services, interest, or dividends to non-residents needs to file these forms. This could be payments for services rendered or goods supplied.
Remittance to Foreign Countries: Payments made to foreign entities for technical consultancy, professional services, royalty payments, etc., may require the filing of these forms to demonstrate compliance with Indian tax regulations.
Transfer of Capital: If there is a transfer of capital or any property between a resident and a non-resident, and it requires remittance outside India, Form 15CA and Form 15CB would be necessary.
Payments Under Tax Treaty: In cases where a double tax avoidance agreement (DTAA) exists between India and the recipient's country, Form 15CA helps confirm the non-resident’s eligibility for any tax exemptions or reductions under the treaty.

What is Form 15CA?

Form 15CA is a self-declaration form that is filled out by the person making the payment to the non-resident. It is essentially a declaration of the remittance made and assures the tax department that tax has been withheld appropriately, or no tax is due on the payment.

Form 15CA contains the following details:

Details of the Remittance: This includes information about the remittance being made, such as the amount, nature of the payment, and the name of the non-resident recipient.
TDS Payment Information: The form requires the taxpayer to declare the TDS that has been deducted on the payment or confirm that no TDS is applicable.
Section under which the Payment is Made: The taxpayer must state under which section of the Income Tax Act, the payment is being made (e.g., under Section 195 for payments to non-residents).
Details of the Non-Resident: Information about the non-resident recipient, including their country of residence, PAN Card or tax identification number, and their nature of business.
Declaration for Double Taxation Avoidance: In case a tax treaty (DTAA) applies, this section helps ensure that any tax reductions under the treaty are claimed.

What is Form 15CB?

The certificate that needs certification by a Chartered Accountant (CA) goes by Form 15CB. The certification on tax compliance and tax at source deductions appears in Form 15CB which a Chartered Accountant issues.

Form 15CB serves the following purposes:

Tax Verification: The CA verifies that the appropriate tax has been deducted at source (TDS), as per the provisions of the Income Tax Act. If no tax is due, they confirm the same.
Calculation of TDS: The CA calculates the amount of tax that should have been deducted based on the provisions of the Income Tax Act or as per the Double Tax Avoidance Agreement (DTAA) between India and the non-resident’s country.
Certificate of Compliance: It acts as a certificate of compliance with tax regulations for foreign payments. This certificate must be obtained from a CA before submitting Form 15CA.

Steps for Filing 15CA and 15CB

Step 1: Obtain Form 15CB from Chartered Accountant

Before filing Form 15CA, a Chartered Accountant must issue Form 15CB, certifying that the tax has been deducted or no tax is due on the payment to the non-resident.
The CA will review the payment details, applicable tax provisions, and any Double Taxation Avoidance Agreement (DTAA) provisions that might apply.

Step 2: Fill Out Form 15CA

Once you have Form 15CB, you can proceed to file Form 15CA.
Form 15CA is available on the Income Tax e-filing portal.
The taxpayer (the one making the payment) needs to fill in details such as:

Name and PAN of the payer.
Name, address, and country of residence of the recipient.
Nature and amount of the payment.
The tax deducted and deposited details (if applicable).
Any other information relevant to the payment.

Step 3: Submit Form 15CA Online

After filling out the details, submit Form 15CA online via the Income Tax e-filing portal.
The form will be submitted to the Income Tax Department records, confirming the remittance and the tax deducted.

Step 4: Confirmation and Acknowledgement

Upon successful submission, you will receive an acknowledgement receipt that you can use for further reference.
A PDF copy of Form 15CA will be generated, and you can download it for your records.

When is 15CA and 15CB Filing Required?

The requirement for filing Form 15CA and 15CB arises in the following situations:

Payment for Services Rendered: Payments made to non-resident professionals or service providers, such as consultancy, legal fees, etc., where TDS is applicable under Section 195.
Royalty Payments: Payments for royalties, such as payments to foreign entities for the use of patents, trademarks, or copyrights, require Form 15CA and 15CB.
Interest Payments: Interest payments made to non-residents on loans or borrowings that are subject to TDS.
Dividend Payments: Payments of dividends to non-resident shareholders are subject to TDS under Section 195 and require filing the forms.
Transfer of Capital: If there is a capital transfer to a non-resident, such as the sale of property or shares, and the remittance is made abroad, these forms are necessary.
Other Foreign Remittances: Any other payments made to non-residents, including for contractual services, supply of goods, etc.

Due Date for Filing 15CA and 15CB

The filing of 15CA and 15CB should be done before remitting the payment to the non-resident. The forms must be submitted before the payment is made, as part of the compliance procedure to ensure that the remittance is in line with Indian tax laws. Typically, the forms must be submitted at least one day before the remittance.

Penalties for Non-Compliance

The necessity to file Form 15CA and obtain Form 15CB when required leads to the following consequences:

An incorrect deduction of TDS from remittances can create tax responsibility for the taxpayer to pay the taxes due.
Noncompliance results in two issues: first the department charges interest for undeducted tax amounts and secondly penalties emerge for tax filing noncompliance.
Payment processing through banks may get delayed due to non-compliance since they will block remittance until necessary forms are submitted.

Conclusion

The filing of Form 15CA and Form 15CB is an essential compliance requirement for individuals and businesses making payments to non-residents. It ensures that Indian tax laws are followed, particularly with regard to the deduction of tax at source (TDS). By properly filing these forms, businesses and individuals can avoid penalties, delays in payments, and ensure that they are in compliance with the provisions of the Income Tax Act.

Disclaimer

The information provided in this blog is purely for general informational purposes only. While every effort has been made to ensure the accuracy, reliability and completeness of the content presented, we make no representations or warranties of any kind, express or implied, for the same.

We expressly disclaim any and all liability for any loss, damage or injury arising from or in connection with the use of or reliance on this information. This includes, but is not limited to, any direct, indirect, incidental, consequential or punitive damage.

Further, we reserve the right to make changes to the content at any time without prior notice. For specific advice tailored to your situation, we request you to get in touch with us.