Follow Us:

Introduction: Foreign remittances play a crucial role in the global economy, with individuals and businesses frequently transferring funds across international borders. However, what often goes unnoticed are the tax implications associated with these transactions. To ensure transparency and compliance with tax regulations, the Indian government introduced Form 15CA and 15CB. In this article, we will delve into the intricacies of these forms, their significance, and when and how they should be submitted.

✍️ Form 15CA and 15CB must be submitted when making payments outside India. They must be presented under different conditions.

✍️ Overseas remittances have tax ramifications that the majority of taxpayers disregard. Section 195 of the Income Tax Act of 1961 stipulates that tax must be deducted from any payments made to non-residents.

✍️ The goal of tax deduction is to collect taxes from non-resident aliens at an earlier stage, as it may be impossible to do so later.

✍️ In certain instances, the individual making payments to NRIs must submit an affidavit on Form 15CA together with Form 15CB.

👉 Now, first of all, let’s understand all about Form 15CA.

✍️ Form 15CA is a declaration of the remitter (sender of money to NRI) and is considered a tool for collecting information on payments to Non-residents. This will help the Income Tax Department determine whether the payments are taxable or non-taxable in the hands of non-residents. Banks and authorized dealers are now becoming more conscious in ensuring that Form 15CA/Form 15CB is received by them before remittance.

✍️ A person making foreign remittances needs to furnish Form 15CA. It is required to be submitted online.

✍️ Form 15CA consists of 4 parts.

Foreign Remittances

Part A: This section must be filled out if the remittance is taxable, and the total of such remittances does not exceed Rs 5 Lakhs during the financial year.

Part B: Part B becomes necessary when the remittance is subject to taxation, and the total of such remittances exceeds Rs 5 Lakhs during the financial year. Additionally, an order or certificate under sections 195(2), 195(3), or 197 of the Income Tax Act must be obtained from the Assessing Officer.

Part C: Part C should be completed if the remittance is taxable, and the total of such remittances surpasses Rs 5 Lakhs during the financial year. This part mandates obtaining a certificate in Form 15CB.

Part D: Part D is applicable when the remittance is not subject to tax under the provisions of the Income Tax Act.

✍️ In certain cases, such as uploading Part C of Form 15CA, an Acknowledgment number of Form 15CB is mandatory.

✍️ A certificate from a practicing Chartered Accountant in Form 15CB is required to be submitted along with Form 15CA.

✍️ The liability of withholding tax can be ascertained and certified by obtaining the certificate from a Chartered Accountant in Form No 15CB. A CA certifies the details of payment, TDS rate, TDS deduction, etc.

✍️ However, certain exceptions are there where Form 15CA and Form 15CB are not required for payments prescribed by RBI as per rule 37BB and transactions that do not require RBI approval. In accordance with sub-rule (3) of Rule 37BB, information in Form 15CA is not required to be furnished in case of following transactions:

  • Remittance is made by an individual and does not require prior approval of RBI
  • Remittance is of the nature specified in column (3) of the specified list below:


Sl. No. Purpose code as per RBI Nature of payment
(1) (2) (3)
1 S0001 Indian investment abroad – in equity capital (shares)
2 S0002 Indian investment abroad – in debt securities
3 S0003 Indian investment abroad – in branches and wholly owned subsidiaries
4 S0004 Indian investment abroad – in subsidiaries and associates
5 S0005 Indian investment abroad – in real estate
6 S0011 Loans extended to Non-Residents
7 S0101 Advance payment against imports
8 S0102 Payment towards imports – settlement of invoice
9 S0103 Imports by diplomatic missions
10 S0104 Intermediary trade
11 S0190 Imports below Rs.5,00,000 – (For use by ECD offices)
12 SO202 Payment for operating expenses of Indian shipping companies operating abroad
13 SO208 Operating expenses of Indian Airlines companies operating abroad
14 S0212 Booking of passages abroad – Airlines companies
15 S0301 Remittance towards business travel
16 S0302 Travel under basic travel quota (BTQ)
17 S0303 Travel for pilgrimage
18 S0304 Travel for medical treatment
19 S0305 Travel for education (including fees, hostel expenses etc.)
20 S0401 Postal services
21 S0501 Construction of projects abroad by Indian companies including import of goods at project site
22 S0602 Freight insurance – relating to import and export of goods
23 S1011 Payments for maintenance of offices abroad
24 S1201 Maintenance of Indian embassies abroad
25 S1202 Remittances by foreign embassies in India
26 S1301 Remittance by non-residents towards family maintenance and savings
27 S1302 Remittance towards personal gifts and donations
28 S1303 Remittance towards donations to religious and charitable institutions abroad
29 S1304 Remittance towards grants and donations to other Governments and charitable institutions established by the Governments
30 S1305 Contributions or donations by the Government to international institutions
31 S1306 Remittance towards payment or refund of taxes
32 S1501 Refunds or rebates or reduction in invoice value on account of exports
33 S1503 Payments by residents for international bidding.

Conclusion: In conclusion, Form 15CA and 15CB are critical tools for ensuring tax compliance when it comes to foreign remittances. Understanding the different parts of Form 15CA, the role of Form 15CB, and when they are required is essential for individuals and businesses engaged in international transactions. Chartered Accountants play a pivotal role in certifying these forms, helping taxpayers navigate the complex world of taxation in cross-border financial dealings. By following the guidelines and submitting these forms accurately, one can ensure smooth and legal foreign remittances while avoiding potential tax issues in the future.


Author Bio

CA Uttam Modi, Qualified as CA in 2019. Having Overall Experience of 7+ years in Field of Corporate Finance Audit and Corporate Law. Graduation in 2015 from MGS University, further Completed Bachelor Degree in Law from Rajasthan university in 2021. Also Complete Certification by ICAI on Concurrent A View Full Profile

My Published Posts

Difference Between Trust, Society and Section 8 Company Role of Chartered Accountant (CA) in Banking Industry Need of Farmer Producer Organisation (FPO) F&O Trading Allowed For CA in Practice or Not Understanding of Turnover & Tax Audit for Market Traders View More Published Posts

Join Taxguru’s Network for Latest updates on Income Tax, GST, Company Law, Corporate Laws and other related subjects.

One Comment

  1. Abhijit Basu says:

    Thank you for the detailed write up. I have one uery….under S1301, Family maintenance by non-residents has been mentioned by Income Tax authorities. What is meant by Non-Resident here? Is it NRI? If yes, NRI payments for family mintenance overseas is not permitted under FEMA

Leave a Comment

Your email address will not be published. Required fields are marked *

Search Post by Date
July 2024