Form 15CA: Guide on Applicability, Parts, Procedure & Common Issues

1. Introduction

Form 15CA is a statutory compliance under the Indian Income-tax Act, 1961, applicable to payments made to non-residents or foreign companies. It is a declaration by the remitter to the Income Tax Department containing details of foreign remittances and the applicable tax deducted at source (TDS).

With increased monitoring of cross-border transactions and strict scrutiny by banks and tax authorities, compliance with Form 15CA has become critical to ensure smooth foreign remittances and correct withholding of tax.

This article provides a comprehensive and practical overview of Form 15CA, covering its applicability, different parts, filing procedure, and common practical challenges.

2. Legal Framework of Form 15CA

Form 15CA is governed by Section 195 of the Income-tax Act, 1961, read with Rule 37BB of the Income-tax Rules, 1962. Rule 37BB mandates furnishing of Form 15CA before making payments to non-residents, except for specified exempted transactions.

The primary objective of Form 15CA is to enable the Income Tax Department to track foreign remittances and applicable tax withholding.

3. Applicability of Form 15CA

Form 15CA is required to be filed when:

• A person makes payment or remittance to a non-resident or foreign company, and
• Such payment is chargeable to tax in India under the Income-tax Act

Form 15CA is required even if the remittance is made from a foreign bank account, provided the payment is chargeable to tax in India.

4. Payments Exempt from Form 15CA

Rule 37BB provides a list of 33 specified payments for which Form 15CA and 15CB are not required, such as:

• Import of goods
• Travel expenses
• Education-related payments
• Medical treatment abroad
• Refunds

However, banks may still require a declaration for documentation purposes.

5. Parts of Form 15CA

Form 15CA is divided into four parts, depending on the nature and amount of remittance.

Part A

• Applicable when remittance or aggregate remittance during the financial year is up to ₹5 lakh
• No Form 15CB is required

Part B

• Applicable when remittance exceeds ₹5 lakh and a certificate under Section 197 or 195(2) / 195(3) is obtained
• No Form 15CB required

Part C

• Applicable when remittance exceeds ₹5 lakh and Form 15CB (CA certificate) is required
• Most commonly used part

Part D

• Applicable when remittance is not chargeable to tax in India

6. Documents Required Before Filing Form 15CA

Before filing Form 15CA, the remitter should keep the following ready:

• Agreement / invoice
• Nature of remittance details
• PAN of remitter and payee (if available)
• TRC and Form 10F (for DTAA benefit)
• Form 15CB (where applicable)

7. Step-by-Step Procedure to File Form 15CA

Step 1: Login to Income Tax Portal

Login to https://www.incometax.gov.in using the remitter’s PAN credentials.

Step 2: Navigate to Form 15CA

Go to:

• e-File → Income Tax Forms → File Income Tax Forms
• Select Form 15CA

Step 3: Select Relevant Part

Choose Part A, B, C, or D based on the nature and amount of remittance.

Step 4: Fill Remittance Details

Enter details such as:

• Country of remittance
• Amount
• Nature of payment
• Applicable TDS rate
• DTAA details (if any)

Step 5: Verification & Submission

Verify the form using EVC or DSC and submit.

An acknowledgement number will be generated, which must be provided to the bank for processing the remittance.

8. Form 15CB – When Required

Form 15CB is a certificate issued by a Chartered Accountant certifying:

• Nature of remittance
• Taxability under the Act
• Applicable DTAA provisions
• Rate of TDS

Form 15CB is mandatory in Part C cases of Form 15CA.

9. Due Date for Filing Form 15CA

There is no prescribed statutory due date. However, Form 15CA must be filed:

• Before making the remittance, and
• Before submitting documents to the bank

10. Common Practical Issues

1. Incorrect Part Selection

Choosing the wrong part may lead to rejection by banks.

2. DTAA Mismatch

Mismatch between DTAA rate and selected nature of payment.

3. PAN Not Available for Non-Resident

System validation issues arise if PAN is not available.

4. Amendments and Corrections

Once submitted, Form 15CA cannot be revised; a fresh form must be filed.

11. Consequences of Non-Compliance

• Delay in foreign remittance
• Higher TDS deduction
• Disallowance under Section 40(a)(i)
• Interest and penalty exposure

12. Best Practices

• Analyse taxability before remittance
• Maintain DTAA documents annually
• File Form 15CA well in advance
• Keep acknowledgements for audit and assessment

13. Conclusion

Form 15CA plays a vital role in ensuring tax compliance for foreign remittances. Proper understanding of its applicability, correct selection of relevant part, and timely filing help businesses avoid unnecessary tax exposure and remittance delays. A structured and proactive approach towards Form 15CA compliance is essential in today’s cross-border transaction environment.

Author: Sindhu Shree