Form 15CA/15CB: A Practical Guide to Foreign Remittance Compliance

Sending Money Abroad? Here’s Why Your Bank Suddenly Wants a CA’s Signature

We have seen that a few years ago, filing Form 15CA and 15CB felt like a box-ticking exercise. This was something the bank insisted on before releasing a foreign payment.

As cross-border transactions have increased, the Income Tax Department has realised that these “Forms” are like a self-reported map of every rupee leaving the country.

Further, it is evident that the officers are using this very map against the filer. Notices under Section 133(6) are issued to the taxpayers seeking clarification.

In some serious cases, we have seen that some have to undergo reassessment proceedings under Section 148A. Now these are routinely traced back to details disclosed in a company’s own Form 15CA/15CB filings. Something that was designed as a compliance safeguard has become a genuine audit trigger.

Hence for any business, while remitting funds abroad, understanding these Forms closely is not just about avoiding a bank hold-up anymore. Instead, it is about staying a step ahead of scrutiny that starts with your own paperwork.

In this article, we will take you through the legal architecture, the practical filing process and the judgment calls that separate a defensible 15CB certificate from a liability waiting to surface in the review.

What is Section 195 and Rule 37BB

If you are making a payment to a non-resident or a foreign company, then under section 195 of the Income-tax Act, 1961, you must deduct Tax Deducted at Source (TDS) if the payment is taxable in India.

Along with that, Section 195(6) requires you to share certain details of the transaction with the tax authorities. Even if there is no tax, you must share the details. And this is why Form 15CA was introduced.

Rule 37BB of the Income-tax Rules, 1962, explains how this reporting should be completed. And it covers:

• When and how must you file Form 15CA?
• When do you need a Chartered Accountant’s certificate (Form 15CB)?
• Which types of foreign remittances are exempt from filing Form 15CA and Form 15CB?

Under FEMA, 1999, Authorised Dealer (AD) banks are required to verify that the necessary Forms have been submitted for overseas remittances.  If applicable, they will ask for Form 15CA and Form 15CB before releasing the funds. In practice, this makes these Forms an essential part of the foreign remittance process, rather than just a reporting requirement.

What is Form 15CA

Under the tax rules, Form 15CA must be filled by the remitter on the income-tax e-filing portal. And this has 4 parts in it; you must select the right one based on your transaction.

Please note that the threshold test is cumulative and not transaction-wise.

You must track the aggregate of remittances to a given non-resident payee across the financial year. Not just the value of the instant transfer.

One common error that we see is that even after crossing the threshold limit of ₹5 lakh, people continue to file under Part A. This is a common and costly error people make. And this leads to bank rejection and potential penalty exposure.

What is Form 15CB

Form 15CB is a certificate issued by a Chartered Accountant. And it is required only when all of the following conditions are met:

• When you are making a payment to a non-resident taxable in India.
• The total amount paid to the same non-resident during the financial year exceeds ₹5 lakh.
• No certificate or order has been obtained from the Assessing Officer under Sections 195(2), 195(3), or 197.

When issuing Form 15CB, the CA verifies and certifies:

• The nature and purpose of the payment.
• Whether the payment is taxable in India.
• Whether any benefit under a Double Taxation Avoidance Agreement (DTAA) is available.
• The applicable TDS rate and the relevant section of the Income-tax Act.
• Details of any tax already deducted, if applicable.

Please know that this Form is not just a random exercise to be done. It requires the CA to provide an independent professional opinion on taxability. Often reconciling domestic law characterisation (royalty, fees for technical services, business income, capital gains) against the more favourable treaty definition.

Since the Supreme Court’s ruling in Engineering Analysis Centre of Excellence on software payments, this characterisation exercise has become considerably more contested, particularly for cross-border software licensing and SaaS subscriptions.

UDIN Requirement

Every Form 15CB must contain a valid Unique Document Identification Number (UDIN) that is generated through the ICAI portal. A Form 15CB issued without a valid UDIN is considered invalid under the ICAI guidelines. And this may lead to disciplinary action against the certifying Chartered Accountant.

Although the Income Tax e-filing portal allows a CA to update the UDIN later, it should only be treated as a temporary operational feature. In practice, the UDIN should be generated and updated promptly to ensure the certificate remains valid.

The Rule 37BB Exemption List

Not every foreign payment triggers this compliance chain. Rule 37BB carries a specified list. That is expanded from 28 to 33 items vide CBDT Notification 93/2015, of payments exempt from both Form 15CA and 15CB.

Common examples for this include:

• Advance payments against imports
• Certain investment remittances by Indian companies abroad
• Specified government transactions.

Separately, remittances by resident individuals under the Liberalised Remittance Scheme that do not require RBI approval are also excluded from the Form 15CA requirement, within the USD 2,50,000 annual limit.

In practice, banks frequently ask for these Forms even where an exemption technically applies. As a matter of internal risk management, a point worth flagging to clients to manage expectations around processing timelines.

Documentation: Building the DTAA File

Before issuing Form 15CB, a Chartered Accountant should collect and review all the necessary documents to determine the correct tax treatment of the payment. These typically include:

• Tax Residency Certificate (TRC) of the non-resident payee
• Form 10F, where the TRC doesn’t capture all prescribed particulars
• No-Permanent-Establishment declaration, where treaty relief is being claimed on business income
• Underlying invoice, agreement, or contract establishing the nature of payment
• Beneficial ownership representation, particularly relevant for royalty and interest income under several Indian treaties

It is also important to note that recent changes to the Income-tax Rules, 2026 have strengthened the documentation requirements for claiming DTAA benefits.

As a result, taxpayers should ensure that Form 10F and other supporting documents are available whenever treaty benefits are claimed, as part of a complete compliance process.

Further Readings: Difference Between Sections 90, 90A and 91: DTAA and Foreign Tax Credit Explained.

Filing Process – Linking 15CB to 15CA Part C

The sequence matters. The CA files Form 15CB first on the e-filing portal (after being assigned the task by the remitter), generating an acknowledgement number upon successful e-verification via Digital Signature Certificate.

The remitter then files Form 15CA Part C, referencing that acknowledgement number to complete the linkage.

Banks will cross-verify this linkage, along with the CA’s UDIN, before releasing funds. Any sort of mismatch between the invoice description, RBI purpose code and the declared nature of remittance typically triggers a compliance hold.

Consequences of Getting It Wrong

• Section 271-I prescribes a penalty of ₹1 lakh for failure to furnish information or for furnishing inaccurate information under Section 195(6). This applies per instance of default, and inaccurate information attracts the penalty even without any tax loss to the exchequer.
• Section 40(a)(i) disallows the expenditure in the payer’s hands where applicable TDS has not been deducted or deposited, creating a direct P&L consequence quite apart from the 15CA/15CB compliance itself.
• For the certifying CA, an incorrect or unsubstantiated 15CB certificate can trigger ICAI disciplinary action, independent of any income-tax consequence to the client.

Recent Updates

You should note that under the Income-tax Rules, 2026, Forms 15CA and 15CB are being renumbered and reissued as Form 145 and Form 146, respectively. And this is effective for remittances initiated on or after 1 April 2026.

The underlying framework, the ₹5 lakh threshold, the four-part structure and the Rule 37BB exemption list remain the same as before.

And this is primarily a renumbering and reporting-enhancement exercise, with additional disclosure fields such as the recipient’s Taxpayer Identification Number and Authorized Dealer’s ITDREIN where applicable.

Remittances initiated before 1 April 2026 continue to be governed by the existing Forms 15CA/15CB, and historical filings remain valid for audit purposes. Firms should update client-facing checklists and internal SOPs to reflect this transition well ahead of the cutover date.

Best Practices to Avoid Notices

• Maintain a standing checklist per client covering TRC, Form 10F/41, invoice, contract and PE declaration before accepting a 15CB assignment.
• Document the taxability reasoning in the working papers, not just the conclusion, including the specific DTAA article relied upon.
• Track cumulative remittances to each payee across the financial year to catch Part A-to-Part C transitions before the bank does.
• Generate UDIN simultaneously (contemporaneously) with certification, not as an afterthought.
• Build a firm-wide protocol for the Form 145/146 transition well before April 2026.

Final Thoughts:

Form 15CA/15CB compliance sits at the intersection of TDS law, treaty interpretation, and FEMA-linked banking process. A combination that rewards precision and punishes shortcuts.

For CA professionals, having proper documentation and disciplined taxability analysis is not just about avoiding the ₹1 lakh penalty under Section 271-I. Instead, they are the difference between a certificate that withstands investigation and one that becomes the practitioner’s own liability.

As the compliance framework migrates to Forms 145 and 146 in 2026, treating this as a moment to tighten internal processes.

Don’t let compliance issues delay your remittance. Our team of experts at MSA can help you assess taxability, obtain Form 15CB where required, and ensure your Form 15CA filing is completed accurately and on time.

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