Form 15CA / 15CB

Form 15CA is an online declaration filed by a payer on the income tax portal before making a payment to a non-resident or a foreign entity. Form 15CB is a certificate issued by a Chartered Accountant that verifies the nature of the remittance, the applicable TDS rate, and any DTAA relief being claimed. Together, they are the compliance checkpoint that ensures TDS on foreign payments under Section 195 is correctly assessed before money leaves India. Banks will not process a foreign remittance above the threshold without a valid Form 15CA acknowledgement.

Who it applies to

• Startups paying foreign SaaS vendors, cloud providers, foreign contractors, or professional service firms above ₹7 lakh per financial year
• Companies paying royalties, technical service fees, interest, or dividends to foreign entities
• Any company making a payment to a non-resident that may be taxable in India

When each form is required

The Rule 37BB exempt list covers routine personal payments: overseas travel, medical treatment abroad, maintenance of close relatives, education-related remittances. Most business payments — SaaS subscriptions, consulting fees, foreign contractor fees, royalties — are not exempt and require at minimum a Form 15CA declaration.

The remittance process

1. Determine whether the payment is taxable in India (income type + applicable DTAA)
2. Obtain the vendor's Tax Residency Certificate (TRC) and Form 10F (if claiming DTAA relief for a reduced or nil TDS rate)
3. CA reviews and issues Form 15CB (required if payment is taxable and exceeds ₹5 lakh)
4. File Form 15CA online on the income tax portal (the 15CB certificate number is referenced in Part C)
5. Submit the Form 15CA acknowledgement to the bank with the remittance instruction
6. Bank processes the transfer

Build in 3–5 business days from the time you brief your CA to the bank processing date. Accounts payable teams that treat foreign payments as same-day items will consistently miss this window.

What most founders miss

Banks enforce Form 15CA even when TDS is nil. Even if TDS is zero under the applicable DTAA (because the payment is classified as business profits, taxable only in the vendor's country), banks increasingly require Form 15CA as a compliance declaration for any foreign remittance above ₹7 lakh. The form documents the analysis — it is not just a TDS collection mechanism. Build Form 15CA filing into every significant foreign payment workflow, regardless of the TDS outcome.

The ₹7 lakh threshold is per payee per financial year — not per transaction. A startup that pays a foreign vendor ₹4 lakh in May and ₹4 lakh in August has crossed the ₹7 lakh threshold by August. The second payment requires Form 15CA. Track cumulative payments to each foreign payee through the financial year.

Penalties for remitting without Form 15CA are significant. Under Section 271C, failure to deduct and deposit TDS on a foreign payment attracts a penalty equal to the amount of TDS that should have been deducted. Banks that process a transfer without the required Form 15CA may also face regulatory consequences — which is why they are strict about enforcement.

The SaaS royalty vs. business profits classification is unsettled. Indian courts have generally held that payments for access to cloud software (SaaS) are business profits — taxable only in the vendor's country under most DTAAs, with no Indian withholding. However, some tax officers characterise such payments as royalties, triggering 10–15% DTAA withholding. The classification depends on the specific software and DTAA. Take a documented CA position for recurring SaaS payments above ₹7 lakh rather than assuming nil TDS without analysis.

See also

• TDS (Tax Deducted at Source) — Section 195 TDS on non-resident payments is the underlying obligation that Form 15CA/15CB documents and certifies
• DTAA (Double Taxation Avoidance Agreement) — DTAA exemptions or reduced rates require TRC and Form 10F from the vendor before 15CB can certify the reduced rate
• FEMA (Foreign Exchange Management Act) — cross-border payments also trigger FEMA reporting; Form 15CA/15CB addresses the income tax layer; FEMA compliance is a separate parallel obligation