Use of Form 15CA and 15CB under the Income Tax Act Forms 15CA and 15CB are required for making remittances (payments) to non-residents to ensure compliance with TDS (Tax Deducted at Source) provisions under the Income Tax Act. These forms help track foreign remittances and prevent tax evasion. 🔹 WhaRead more
Use of Form 15CA and 15CB under the Income Tax Act
Forms 15CA and 15CB are required for making remittances (payments) to non-residents to ensure compliance with TDS (Tax Deducted at Source) provisions under the Income Tax Act. These forms help track foreign remittances and prevent tax evasion.
🔹 What is Form 15CA?
📌 Purpose: Form 15CA is a declaration by the remitter (payer) stating whether TDS is applicable on the foreign remittance. It helps the Income Tax Department track taxable foreign payments.
📌 Who files it?: The remitter (payer) files Form 15CA electronically on the Income Tax e-Filing portal.
📌 When is it required?:
- If the remittance is taxable in India and TDS is deducted.
- If the remittance amount exceeds ₹5 lakh, then Form 15CB is also required.
🚀 Key Point: Form 15CA is MANDATORY in most cases, even if TDS is not applicable.
🔹 What is Form 15CB?
📌 Purpose: Form 15CB is a certificate issued by a Chartered Accountant (CA) confirming the taxability of a foreign remittance. The CA verifies:
- Nature & purpose of the remittance
- Taxability under the Income Tax Act & DTAA (Double Taxation Avoidance Agreement)
- TDS rate and deduction compliance
📌 Who issues it?: A Chartered Accountant (CA) issues Form 15CB before submitting Form 15CA (Part C).
📌 When is it required?:
- If the remittance exceeds ₹5 lakh in a financial year.
- If the remittance is taxable in India under the Income Tax Act.
- If a DTAA benefit is claimed.
🚀 Key Point: Form 15CB is NOT required for transactions where:
✔️ Remittance is covered under Rule 37BB (specified list of exempted payments).
✔️ Payment is below ₹5 lakh in a financial year.
🔹 When Do You Need Both Forms?
| Remittance Amount | Taxable in India? | Form 15CA Required? | Form 15CB Required? |
|---|---|---|---|
| Below ₹5 lakh | No | ❌ Not Required | ❌ Not Required |
| Below ₹5 lakh | Yes | ✅ Required (Part A) | ❌ Not Required |
| Above ₹5 lakh | No | ✅ Required (Part D) | ❌ Not Required |
| Above ₹5 lakh | Yes | ✅ Required (Part C) | ✅ Required |
🔹 How to File Form 15CA & 15CB?
1️⃣ Obtain Form 15CB from a CA (if required).
2️⃣ Log in to the Income Tax e-Filing Portal https://www.incometax.gov.in/.
3️⃣ Navigate to “File Income Tax Forms” > “Form 15CA”.
4️⃣ Fill in details & submit the form.
5️⃣ Provide acknowledgment to the bank for processing the remittance.
🔹 Key Takeaways
✔ Form 15CA is filed by the remitter for foreign remittances.
✔ Form 15CB is required only if the remittance exceeds ₹5 lakh and is taxable in India.
✔ These forms help track foreign payments and ensure TDS compliance.
✔ Banks will not process foreign remittances without Form 15CA (and 15CB, if required).
Whether you need to deduct TDS on the reimbursement of expenditure to your consultant depends on the nature of the bill and the agreement with the consultant. Here’s how to determine it: 1️⃣ If the Reimbursement is Part of the Professional Fee: If the consultant has raised a single invoice coveringRead more
Whether you need to deduct TDS on the reimbursement of expenditure to your consultant depends on the nature of the bill and the agreement with the consultant. Here’s how to determine it:
1️⃣ If the Reimbursement is Part of the Professional Fee:
2️⃣ If the Reimbursement is Separate & on Actuals:
3️⃣ Best Practices:
✅ Ask the consultant to bill separately for professional fees and reimbursement.
See less✅ Maintain proper documentation (supporting invoices) to justify the non-deduction of TDS in case of scrutiny.
✅ If unsure, consult a tax expert to ensure compliance.