Form 15CA and Form 15CB sit at the intersection of the Income Tax Act and FEMA. The forms are not difficult, but the documentation around them is what causes the most friction with banks. This note clarifies when each form is required and what to keep on file.
The framework
For a remittance from India to a non resident, the Income Tax Act requires the remitter to determine whether tax is to be deducted. Form 15CA is a declaration by the remitter. Form 15CB is a certification by a Chartered Accountant. The combination of the two satisfies the bank that the tax position has been considered.
When 15CB is not required
For specified payments listed in Rule 37BB, only 15CA Part D is required and 15CB is not. For payments below the prescribed monetary threshold in a financial year, 15CB is also not required. For payments by an individual that do not require RBI approval and that are below the threshold, both forms may be skipped subject to bank requirements.
Common mistakes
Filing the wrong part of 15CA. Missing supporting documents like the invoice, the agreement and the tax residency certificate. Misclassifying the nature of remittance. Treating a payment as exempt that is in fact subject to TDS at a treaty rate.
The documentation pack
Keep a single PDF for each remittance that contains the invoice, the agreement, the TRC, the no PE declaration where required, the tax computation, the 15CB and the 15CA acknowledgement. The bank reviews the pack and clears the remittance.
Closing
Most remittance delays are administrative. A consistent documentation pack reduces back and forth. A pre transaction check by the firm avoids the rare case where TDS has been missed and the remittance has to be revisited.