The 15CA/15CB Framework
Section 195 of the Income Tax Act requires any person paying any sum to a non-resident (other than salary) to deduct TDS at the applicable rate. Form 15CB (signed by a CA) certifies: the nature and purpose of the payment, whether the payment is taxable in India, the applicable DTAA (if any) and treaty rate, the amount of TDS deducted, and confirmation that all information is true and correct. Without Form 15CB, the bank cannot verify that tax obligations have been met.
Form 15CA is the online equivalent of a remittance intimation to the Income Tax Department, filed on the e-filing portal (incometax.gov.in) before the bank transaction. The Form 15CA contains the same information as 15CB in a structured format. The acknowledgement number from Form 15CA must be quoted on the bank's A2 form for foreign remittances.
Rule 37BB exemptions: verify before assuming exemption
Rule 37BB of the Income Tax Rules lists 28 types of remittances that are exempt from 15CA/15CB requirements (ship/aircraft running expenses, advance tax, custom duty imports, etc.). Dividend remittances, royalty payments, technical fee payments, and management fee payments to foreign parent are NOT on the exempt list. Always verify before assuming a remittance is exempt.
When 15CB Is Not Required: The Part A Shortcut
If the remittance does not exceed INR 5 lakh (approximately USD 6,000) in aggregate in a financial year and it is not a chargeable sum under the Income Tax Act (i.e., the non-resident has no taxable income in India from this payment), only Form 15CA Part A is required - no Form 15CB. This simplification is useful for small recurring payments (software subscriptions, minor technical support fees).
If the remittance is covered by a certificate from the Assessing Officer (under Section 195(2) or 195(3)) determining the appropriate tax rate, Form 15CA Part C is filed without a separate Form 15CB. GCCs that make large recurring royalty or service fee payments to the parent should consider obtaining a certificate from the AO to simplify the process.
The Filing Process Step by Step
Step 1: The company's CA prepares Form 15CB, verifying the nature of payment, DTAA applicability, and TDS computation. The CA signs digitally (using the CA's own DSC). Step 2: The company's authorized signatory logs into the income tax e-filing portal and files Form 15CA, referencing the 15CB acknowledgement number. Step 3: Download the Form 15CA acknowledgement (with a unique transaction number). Step 4: Submit 15CA and 15CB printouts to the bank along with the A2 form and swift details for the remittance.
Processing time: the bank will typically process within 2-3 working days of receiving the complete set of documents. For remittances above USD 1 million, the bank's FEMA compliance team may require additional documentation. Some banks have online portals for submitting 15CA/15CB documents - check with your relationship manager.
Glossary terms referenced in this guide