How to File Form 15CA & 15CB Online: Cross-Border Remittance Compliance

Why Form 15CA and 15CB Matter for Cross-Border Payments

Every time an Indian entity makes a payment to a non-resident or foreign company, the Income Tax Department wants to ensure that appropriate tax has been deducted at source under Section 195 of the Income Tax Act. Form 15CA is the payer's declaration confirming tax compliance, and Form 15CB is a chartered accountant's certificate verifying the tax treatment of the payment.

For foreign companies with Indian subsidiaries, these forms are a routine but critical compliance requirement. Your Indian subsidiary likely makes multiple cross-border payments each month -- intercompany service fees, royalties, dividend distributions, software licence fees, management charges, and interest on external commercial borrowings. Each payment requires proper 15CA/15CB compliance before the bank will process the remittance.

Banks in India will not process any foreign remittance without a valid Form 15CA acknowledgement. Miss this step, and your payment is blocked.

Understanding the Three Parts of Form 15CA

Form 15CA is divided into three parts based on the nature and amount of the remittance:

The INR 5 lakh threshold is cumulative across the financial year for payments to the same non-resident. Once your payments to a single recipient cross INR 5 lakh in a financial year, every subsequent payment requires Part B or Part C filing.

When Form 15CA Is Not Required

Rule 37BB of the Income Tax Rules specifies 33 types of payments that are exempt from Form 15CA/15CB requirements. Key exemptions include:

• Import payments: Payments for import of goods (this is the most commonly used exemption for subsidiaries importing equipment or raw materials from the parent)
• Individual remittances under LRS: Remittances by individuals that do not require prior RBI approval under FEMA, such as personal travel, education abroad, maintenance of relatives, and medical treatment under the Liberalised Remittance Scheme
• Diplomatic payments: Payments to embassies, consulates, and international organisations
• Government transactions: Certain government-related payments specified in the schedule

However, even for exempt transactions, authorised dealer banks may still request documentation as part of their internal compliance procedures.

Form 15CB: The Chartered Accountant's Certificate

Form 15CB is the chartered accountant's certificate that verifies the tax treatment of the cross-border payment. It must be filed electronically before Form 15CA Part C can be submitted. The CA certifies:

• The nature of the payment and the applicable section of the Income Tax Act
• Whether a Double Taxation Avoidance Agreement (DTAA) applies and the relevant article
• The applicable TDS rate (domestic law rate or DTAA rate, whichever is lower)
• The amount of TDS deducted and the challan details
• Whether the recipient has a Tax Residency Certificate (TRC) from their home country

Key Information Required for Form 15CB

• Name, address, and country of the non-resident recipient
• PAN or Tax Identification Number of the recipient (if available)
• Nature of remittance and purpose code as per RBI
• Amount of remittance in INR and foreign currency
• Applicable DTAA, article number, and treaty rate
• TDS challan details (BSR code, date, challan serial number)
• Whether the recipient has a Permanent Establishment (PE) in India

Step-by-Step: Filing Form 15CB Online

Form 15CB must be filed by the chartered accountant using their own e-filing credentials on the Income Tax portal.

Step 1: CA Logs Into the e-Filing Portal

The CA logs into incometax.gov.in using their CA credentials (not the company's credentials). Navigate to e-File, then Income Tax Forms, then File Income Tax Forms, and select Form 15CB.

Step 2: Select Submission Mode and Financial Year

Choose Online as the submission mode, select the appropriate Financial Year (e.g., 2025-26), and click Continue.

Step 3: Fill in Remitter and Recipient Details

Enter the PAN of the Indian entity making the payment (remitter), the name and address of the non-resident recipient, their country of residence, and their Tax Identification Number if available.

Step 4: Specify Payment Details

Enter the nature of remittance using the correct RBI purpose code, the amount in both INR and foreign currency, and the date of proposed remittance. Specify whether the payment is covered by any DTAA.

Step 5: Determine Applicable Tax Rate

This is the most critical section. The CA must determine whether to apply:

• Domestic law rate: Withholding tax rates under Section 195 plus applicable surcharge and 4% health and education cess
• DTAA rate: The treaty rate between India and the recipient's country, which does NOT require surcharge or cess to be added

The lower of the two rates applies. For example, India's domestic rate on royalties under Section 115A is 20% plus surcharge and cess (effective ~21.8%), but the India-Singapore DTAA rate on royalties is 10% (flat, no surcharge/cess), so the DTAA rate of 10% applies.

Step 6: Enter TDS Challan Details

Enter the TDS challan details: BSR code of the bank branch where TDS was deposited, date of deposit, and challan serial number. The TDS must be deposited before the form is filed.

Step 7: e-Verify and Submit

After reviewing all details, the CA e-verifies the form using either a Digital Signature Certificate (DSC) or Electronic Verification Code (EVC). Upon successful verification, an acknowledgement number is generated. This acknowledgement number is required to file Form 15CA Part C.

Step-by-Step: Filing Form 15CA Online

Form 15CA is filed by the company (or its authorised representative) on the Income Tax portal.

For Part A (Remittance up to INR 5 Lakh)

1. Log into the e-filing portal with the company's credentials
2. Navigate to e-File, Income Tax Forms, File Income Tax Forms, select Form 15CA
3. Select Part A and enter the financial year
4. Fill in the remitter's details (PAN, name, address, status)
5. Enter the recipient's details and remittance amount
6. Self-declare the nature of remittance and tax compliance
7. e-Verify using DSC or EVC and submit

For Part C (Remittance Exceeding INR 5 Lakh)

1. Ensure Form 15CB has been filed and e-verified by the CA first
2. Log into the e-filing portal with the company's credentials
3. Select Form 15CA, choose Part C, and enter the financial year
4. Enter the Form 15CB Acknowledgement Number -- the portal automatically pre-fills details from the 15CB
5. Verify the pre-filled information and add any additional details
6. e-Verify using DSC or EVC and submit
7. Download the acknowledgement and provide it to your authorised dealer bank for processing the remittance

TDS Rates on Common Cross-Border Payments

Understanding applicable TDS rates is essential for correct 15CA/15CB filing. Section 195 has no minimum threshold -- TDS applies on all taxable payments to non-residents regardless of amount.

Note: DTAA rates do not attract surcharge or health and education cess, making them often more beneficial even when the base rate appears similar. To claim DTAA benefits, the recipient must provide a valid Tax Residency Certificate (TRC) from their home country and Form 10F.

Applying DTAA Benefits: Requirements and Documentation

To apply DTAA rates (which are typically lower than domestic rates), the following documentation must be obtained from the non-resident recipient before the remittance:

• Tax Residency Certificate (TRC): Issued by the tax authority of the recipient's country of residence, confirming they are a tax resident of that country
• Form 10F: A self-declaration by the recipient providing details like name, status (individual/company), nationality, tax identification number, and period of residential status
• No PE Declaration: If the DTAA article requires absence of a permanent establishment in India, a declaration from the recipient confirming no PE in India

Without these documents, the domestic rate (with surcharge and cess) must be applied, which is almost always higher.

Practical Scenarios: How Foreign Subsidiaries Handle 15CA/15CB

Understanding the theory is one thing, but foreign subsidiaries face specific recurring scenarios that require careful handling. Here are the most common payment types and how to process them correctly.

Intercompany Service Fees (Management Charges)

When your Indian subsidiary pays the parent company for management services, technical support, or shared services, these payments are classified as Fees for Technical Services (FTS) under Section 9(1)(vii) of the Income Tax Act. The domestic TDS rate under Section 115A is 20% plus surcharge and cess (raised from 10% by the Finance Act 2023). However, under most DTAAs, FTS rates range from 10-15% without surcharge or cess, so the treaty rate is now almost always more beneficial. The CA must verify whether the services qualify as FTS under both the domestic law and the applicable treaty, as definitions vary across DTAAs. Some treaties (like the India-US DTAA) use a narrower definition of FTS that requires the services to make available technical knowledge, which can reduce or eliminate withholding if the knowledge is not transferred.

Royalty and Licence Fee Payments

Payments for use of trademarks, patents, copyrights, or software licences to the foreign parent are treated as royalties. The domestic rate under Section 115A is 20% plus surcharge and cess (raised from 10% by the Finance Act 2023). Treaty rates vary: the India-US DTAA prescribes 15%, while the India-Singapore DTAA provides 10%. A critical distinction arises with software payments: the Supreme Court of India in the Engineering Analysis Centre of Excellence case (2021) ruled that payments for use of copyrighted software (not transfer of copyright) are not royalties. If your CA relies on this ruling, the Form 15CB must specifically reference the decision and justify the non-royalty classification.

Dividend Repatriation

When the Indian subsidiary declares dividends to the foreign parent, withholding tax at 20% plus surcharge and cess applies under domestic law. Most DTAAs reduce this to 15% (India-US, India-UK) or 10% in some cases. For a subsidiary distributing INR 10 crore in dividends, the difference between the domestic rate (approximately 20.8% effective) and the DTAA rate (15% flat) amounts to INR 58 lakh in tax savings. Always ensure the TRC and Form 10F are obtained well before the dividend declaration date.

Interest on External Commercial Borrowings (ECBs)

If the Indian subsidiary has borrowed from the parent company under the ECB framework, interest payments are subject to TDS at 20% plus surcharge and cess under domestic law, reduced to 10-15% under most DTAAs. The ECB must comply with RBI's all-in-cost ceiling, and the interest rate itself must be within the benchmark rate plus the applicable spread. The AD bank verifying the remittance will cross-check ECB-2 return compliance before processing.

Reimbursement of Expenses

Pure reimbursements at cost (without any markup or profit element) present a nuanced situation. While the Income Tax Department has historically attempted to tax reimbursements, several tribunal decisions have held that genuine cost reimbursements without a profit element do not constitute income of the recipient and therefore no TDS is required. However, the burden of proof lies on the payer to demonstrate that the payment is a genuine reimbursement. Your CA should document this position carefully in Form 15CB and the company should maintain supporting invoices, cost allocation worksheets, and intercompany agreements.

Building an Internal Process for Recurring Remittances

Foreign subsidiaries making regular cross-border payments should establish a systematic process rather than handling each remittance ad-hoc:

• Maintain a DTAA documentation file: Obtain TRC and Form 10F from the parent company at the start of each financial year. Most TRCs are valid for the full tax year of the issuing country
• Track cumulative payments: Maintain a tracker for each non-resident recipient showing cumulative payments in the financial year. This determines when you move from Part A (under INR 5 lakh) to Part C (over INR 5 lakh) territory
• Pre-deposit TDS: Deposit TDS by the 7th of the following month (or 30th April for March payments). The challan details are required before 15CB can be filed
• Coordinate with the CA: Share payment details with your CA at least 3-5 working days before the intended remittance date to allow time for 15CB preparation, filing, and e-verification
• Maintain a purpose code reference: Create a mapping of your common payment types to RBI purpose codes to ensure consistency and avoid bank rejections

For companies managing multiple types of cross-border payments, engaging a FEMA and RBI compliance specialist can streamline the entire process and prevent costly errors.

Penalties for Non-Compliance

The consequences of failing to file Form 15CA/15CB or filing incorrectly are significant:

• Section 271I penalty: INR 1 lakh for failure to furnish Form 15CA/15CB before making the remittance, or the transaction amount, whichever is lower
• Interest under Section 201(1A): If TDS is not deducted or deducted at a lower rate, interest at 1% per month (for non-deduction) or 1.5% per month (for non-payment after deduction) applies on the outstanding TDS amount
• Disallowance under Section 40(a)(i): If TDS is not deducted on a payment to a non-resident, the entire payment amount is disallowed as a business expenditure in the payer's income tax return. This is the most severe consequence as it directly increases taxable income
• Bank refusal: Banks will not process the foreign remittance without a valid Form 15CA acknowledgement, effectively blocking the payment

Lower or NIL TDS Certificate: Section 197

If the non-resident recipient believes the payment is not taxable in India (or taxable at a lower rate), they can apply for a certificate under Section 197 or Section 195(2) of the Income Tax Act. This is particularly useful for:

• Payments covered by a DTAA exemption (e.g., business profits with no PE in India)
• Payments that are capital in nature and not subject to TDS
• Situations where the effective tax rate after DTAA application is significantly lower than the statutory rate

If such a certificate is obtained, Form 15CA Part B is filed instead of Part C, and Form 15CB from a CA is not required. The certificate number from the AO is quoted directly in Part B.

Common Mistakes and How to Avoid Them

• Filing 15CA before 15CB: For Part C filings, 15CB must always be filed and e-verified first. The 15CB acknowledgement number is required to submit 15CA Part C
• Wrong purpose code: Using an incorrect RBI purpose code can delay bank processing. Cross-reference the RBI's master direction on reporting requirements for the correct code
• Not obtaining TRC before remittance: Without a valid Tax Residency Certificate, you cannot apply DTAA rates and must deduct TDS at the higher domestic rate
• Ignoring cumulative threshold: The INR 5 lakh threshold is cumulative per recipient per financial year. Track all payments to each non-resident to determine when you cross from Part A to Part C territory
• Late TDS deposit: TDS must be deposited before filing the forms. The challan details are required fields in Form 15CB
• Not filing for exempt transactions: While Rule 37BB exempts 33 categories, banks may still require 15CA for their internal compliance. Clarify with your FEMA compliance advisor which transactions are truly exempt

Key Takeaways

• Form 15CA is mandatory for all cross-border payments to non-residents from India, with Form 15CB (CA certificate) additionally required when cumulative payments to a recipient exceed INR 5 lakh in a financial year
• File 15CB before 15CA for Part C filings -- the acknowledgement number from 15CB is needed to complete 15CA
• Apply DTAA rates to minimise withholding tax, but only after obtaining a Tax Residency Certificate and Form 10F from the non-resident recipient
• Penalty for non-filing is INR 1 lakh per instance under Section 271I, plus potential disallowance of the entire payment as a business expense under Section 40(a)(i)
• Track cumulative payments to each non-resident across the financial year to correctly determine which Part of Form 15CA applies