Foreign Remittance Certification (Form 15CB)

What is Form 15CB certification?

When money is paid to a non-resident, the payer may need to deduct tax in India first. Form 15CA is the payer's online declaration about the remittance. For larger taxable remittances, Form 15CB — a chartered accountant's certificate — is needed first, confirming the nature of the payment, whether it's taxable in India, the applicable rate under the law or tax treaty, and the tax deducted.

Banks ask for these forms before processing many foreign remittances. Getting the analysis right protects the payer from being treated as in default for tax not deducted.

The key terms

How the forms work:

Form 15CA

The remitter's online declaration, in parts depending on the amount and taxability.

Form 15CB

The CA's certificate on taxability and TDS, needed for taxable remittances above the threshold.

Taxability

Whether the income is taxable in India under domestic law and the tax treaty.

Treaty rate

A lower rate under the tax treaty, if the recipient provides a TRC and Form 10F.

Specified list

A list of remittance types, such as some imports and travel, that don't need the forms.

Lower deduction certificate

A certificate from the tax department allowing lower TDS on a payment.

UDIN

The unique number every 15CB certificate carries.

Why it matters

Getting remittances wrong is costly:

Payer liability

Payers who don't deduct tax can be liable for it, with interest.

Expense disallowance

Payments without required TDS can be disallowed as expenses.

Bank requirements

Banks won't remit without the forms where required.

Treaty benefits

Correct treaty analysis can reduce or eliminate TDS.

Penalties

Not filing Form 15CA, or wrong filings, attract penalties.

Characterisation

Whether a payment is royalty, FTS or business income changes the answer.

Grossing up

Where the payer bears the tax, the gross-up must be calculated correctly.

Who is this for?

Some remittances, such as many import payments, don't need 15CA/15CB; we check before certifying.

Which part of Form 15CA applies?

Under the current rules, broadly:

What we'll need from you

Contract or invoice

The agreement and invoice for the payment.

Recipient details

Name, address, country and tax status.

TRC and Form 10F

For treaty benefits.

No-PE declaration

Where business income is claimed not taxable.

Payment details

Amount, currency, bank and purpose code.

Tax payment

TDS challan, where tax is deducted.

Fees are per certificate, with discounts for recurring remittances.

How we certify remittances

Our approach:

1. 1

   Review

   We review the contract and nature of the payment.

2. 2

   Analyse

   Taxability under domestic law and the treaty is determined.

3. 3

   Compute

   TDS is computed, including gross-up where applicable.

4. 4

   Certify

   Form 15CB is prepared and uploaded with a UDIN.

5. 5

   Declare

   You file Form 15CA with our support.

6. 6

   Remit

   Forms go to the bank for the remittance.

After the remittance

Follow-through:

Deposit TDS

Deposit tax deducted by the due date.

File returns

Report the payment in the quarterly TDS return.

Issue certificates

Issue TDS certificates to the recipient.

Keep documents

Keep TRCs, Form 10F and declarations.

Recurring payments

Update the analysis if contracts change.

Treaty documents

Collect fresh TRCs each year.

Benefits and responsibilities