Published 9 May 2026
Section 195 of the Income-tax Act, 1961 read with Rule 37BB -- the Chartered Accountant certificate, the four-part self-declaration, the threshold above which Form 15CB is mandatory, the e-filing portal flow, and the section 271-I rupees one lakh penalty for non-compliance
Taxpayer Brief
Every outward remittance from India to any non-resident -- including a Non-Resident Indian repatriating Non-Resident Ordinary funds, an Indian company paying royalty to a foreign holding entity, an Indian importer paying for goods, or a remitter sending funds to a relative abroad -- is subject to the section 195 read with Rule 37BB framework. The remitter must file Form 15CA (self-declaration) and, depending on the amount and nature, Form 15CB (Chartered Accountant certificate). The Authorised Dealer bank will not process the wire without these documents. This article walks through the four parts of Form 15CA, the threshold above which Form 15CB is mandatory, the e-filing portal flow, and the consequences of getting it wrong.
1. The Statutory Framework
Provision | Effect |
|---|---|
Sub-section (1) of section 195 | Tax Deducted at Source on every Indian-source payment to a Non-Resident at the rates in force |
Sub-section (6) of section 195 | Person responsible for payment to a Non-Resident must furnish the prescribed information to the income-tax department in such form as may be prescribed |
Rule 37BB | Prescribes Form 15CA (the assessee's self-declaration) and Form 15CB (the Chartered Accountant's certificate) |
Section 271-I | Penalty of ₹1 lakh for failure to file Form 15CA or Form 15CB or for furnishing inaccurate particulars |
2. The Four Parts of Form 15CA -- When to Use Which
Part | When to Use | Form 15CB Required? |
|---|---|---|
Part A | Remittance is taxable but the aggregate of remittances during the financial year does not exceed ₹5 lakh | No -- self-declaration only |
Part B | Remittance is taxable, exceeds ₹5 lakh, AND the assessee has obtained a certificate / order from the assessing officer under section 195(2) / 195(3) / 197 | No -- the assessing officer's order substitutes for the Chartered Accountant certificate |
Part C | Remittance is taxable, exceeds ₹5 lakh, AND the assessee is relying on the Chartered Accountant's certificate (no assessing officer order) | Yes -- Form 15CB by Chartered Accountant |
Part D | Remittance is not taxable in India under domestic law / the relevant Double Taxation Avoidance Agreement (e.g., personal gift between relatives, foreign-currency receipt by a Non-Resident from another Non-Resident in India) | No -- self-declaration that the remittance is not chargeable to tax |
The ₹5 lakh threshold is per financial year, not per remittance The aggregate of all taxable remittances by the same remitter to all Non-Residents during a financial year is what counts. A single ₹2 lakh remittance is below threshold (Part A); but if the remitter has already sent ₹4 lakh earlier in the year, the next remittance crosses the cumulative ₹5 lakh and triggers Part C / Form 15CB. |
3. The Form 15CB Content
Form 15CB is the Chartered Accountant's certificate, on the Chartered Accountant's letterhead with seal and Membership Number, certifying eight key items.
Field | Content |
|---|---|
Nature of remittance | Royalty / Fees for Technical Services / Interest / Dividend / Capital Gain / Salary / Pension / Gift / Etc. -- per Reserve Bank of India purpose code |
Whether chargeable to tax in India | Yes / No, with reference to relevant section / treaty article |
Amount in foreign currency and Indian Rupee equivalent | At the State Bank of India Bills-Buying rate of the day of remittance |
Tax Deducted at Source rate applied | Per section 195 / Double Taxation Avoidance Agreement / order of assessing officer |
Tax Deducted at Source amount | In Indian Rupees |
Date of payment / credit | Calendar date |
Section under which Tax Deducted at Source is deducted | Section 195 generally; section 192 / 194-I etc. if applicable |
Certification clause | Chartered Accountant certifies that the information is true and correct to the best of the Chartered Accountant's knowledge and belief |
4. The Step-by-Step Filing Flow
Step | Action | Owner |
|---|---|---|
1 | Remitter / Non-Resident Indian decides on the outward remittance -- amount, currency, purpose, beneficiary | Remitter |
2 | Engage a Chartered Accountant to prepare Form 15CB if remittance is taxable and exceeds the ₹5 lakh threshold | Remitter / Chartered Accountant |
3 | Chartered Accountant reviews supporting documents -- foreign invoice, contract, Tax Residency Certificate of beneficiary, Foreign Inward Remittance Certificate trail, Permanent Account Number records, Tax Deducted at Source computation | Chartered Accountant |
4 | Chartered Accountant logs in to the Indian e-filing portal as Tax Professional and files Form 15CB online | Chartered Accountant |
5 | System-generated Form 15CB Acknowledgement Number issued; Chartered Accountant prints and signs | Chartered Accountant |
6 | Remitter (assessee) logs in to the Indian e-filing portal and files Form 15CA Part C, quoting the Form 15CB Acknowledgement Number | Remitter |
7 | Remitter pays Tax Deducted at Source through Challan ITNS-281 / income-tax e-pay; obtains the Challan Identification Number | Remitter |
8 | Remitter approaches the Authorised Dealer bank with Form 15CA acknowledgement, Form 15CB acknowledgement, Foreign Inward Remittance Certificate / pro-forma documents, foreign-currency request | Remitter |
9 | Authorised Dealer bank executes the wire after debiting the rupee equivalent from the Non-Resident Ordinary / Non-Resident External / Foreign Currency Non-Resident account; issues the Society for Worldwide Interbank Financial Telecommunication confirmation | Authorised Dealer bank |
5. Common Errors and Section 271-I Penalty
Error | Consequence |
|---|---|
Filing Form 15CA Part A (below ₹5 lakh) when aggregate exceeds ₹5 lakh | Inaccurate particulars; section 271-I penalty of ₹1 lakh |
Failing to deduct Tax Deducted at Source where remittance is taxable | Section 201(1) defaulter; section 201(1A) interest; section 271C penalty up to the amount of Tax Deducted at Source |
Using Part D (non-taxable) for a taxable remittance | Inaccurate particulars; section 271-I penalty |
Form 15CB without supporting documents in the file | Chartered Accountant disciplinary risk; assessment officer's adverse view on the remittance |
Not converting Form 15CB Acknowledgement Number to Form 15CA before bank submission | Bank rejects; remittance delayed |
Filing Form 15CA / 15CB after the bank has executed the wire | Section 271-I penalty for late filing |
The Chartered Accountant's defensive file For every Form 15CB issued, the Chartered Accountant should retain a Form 15CB working file containing -- (i) the foreign invoice / contract; (ii) the Tax Residency Certificate of the beneficiary if treaty rate is applied; (iii) the Tax Deducted at Source computation; (iv) the Challan Identification Number for Tax Deducted at Source paid; (v) the Reserve Bank of India purpose code matrix mapping; (vi) the Society for Worldwide Interbank Financial Telecommunication confirmation. Retain for at least 8 assessment years -- the section 148A reopening window. |
6. Special Cases
- Personal gift to relative abroad -- typically Part D, supported by a brief letter from the remitter and the relative establishing the relationship and the nature of the transfer.
- Reserve Bank of India Liberalised Remittance Scheme remittance for education / medical / investment -- typically Part D for individuals, since the underlying purpose is not 'chargeable to tax in India' for the remitter.
- Royalty / Fees for Technical Services with Tax Residency Certificate -- Form 15CB at the treaty rate (typically 10%).
- Repatriation of Non-Resident Ordinary balance under United States Dollar one million per year cap -- Form 15CA Part C plus Form 15CB; the Chartered Accountant certifies the source-of-funds and Tax Deducted at Source compliance on the underlying Indian-source income.
- Reimbursement of expenses -- check whether the expenses themselves are taxable in India (services rendered in India / by Permanent Establishment).
BharatTax NRI Compliance Tool Is your Non-Resident status reflected in the income-tax department's Permanent Account Number database, and is your Permanent Account Number-Aadhaar status correctly tagged as exempt? Use the NRI Compliance Tool at itr.bharattax.co to verify, update residential status on the e-filing portal, and pre-validate your Non-Resident External or Non-Resident Ordinary bank account for any refund. |
7. Case Law Reference and Anticipatory Legal Analysis
Case Law Reference: Foreign-remittance compliance under Form 15CA / 15CB Rule 37BB of the Income-tax Rules, 1962 prescribes the Form 15CA / 15CB framework for foreign remittances. The Income Tax Appellate Tribunal Mumbai in [VERIFY: confirm Tribunal citation on Form 15CA / 15CB compliance] confirmed the procedural architecture. The Karnataka High Court in [VERIFY: confirm High Court ruling on the de minimis threshold] addressed the rupees five lakh per remittance / rupees thirty lakh per year aggregate de minimis. [VERIFY: cross-check specific Tribunal citations in the BharatTax case-law database.] |
Prospective Interpretation -- The CA-certificate liability Two unsettled interpretive issues. (i) Treatment of the Chartered Accountant's professional liability under Form 15CB -- erroneous certificates may attract personal liability under section 271J. (ii) Treatment of the e-Form 15CA / 15CB architecture. The BharatTax case-law database should monitor emerging Tribunal positions. [VERIFY: confirm Tribunal decisions emerging on the Rule 37BB framework.] |
8. Key Takeaways
- Section 195(6) read with Rule 37BB requires Form 15CA for every outward remittance to a Non-Resident, and Form 15CB by a Chartered Accountant for taxable remittances above ₹5 lakh per financial year aggregate.
- Four parts of Form 15CA -- A (taxable below ₹5 lakh), B (taxable above ₹5 lakh with assessing officer order), C (taxable above ₹5 lakh with Chartered Accountant certificate), D (not taxable).
- Form 15CB filing flow -- Chartered Accountant on e-filing portal -> Acknowledgement -> Remitter files Form 15CA quoting 15CB Acknowledgement -> Tax Deducted at Source paid -> Authorised Dealer bank executes.
- Section 271-I -- ₹1 lakh penalty for non-filing or inaccurate particulars; section 201(1)/201(1A) for non-deduction; section 271C for non-deduction of large amounts.
- Save the Chartered Accountant working file for at least 8 assessment years.
Disclaimer: This article is for general information only. It does not constitute tax / legal advice. Please consult a qualified Chartered Accountant or tax practitioner for advice specific to your circumstances. The legal position is current as of FA 2024 (No. 2) / FA 2025; subsequent amendments and CBDT notifications may modify the position.