form 15 ca &15cb

Finance Manager

Dear Experts,

If the assessee is making any foreign payments (including purchase of rammaterials) payments made through foreign currency whether form 15cb and 15ca is applicable ?

(2) What is the legal meaning of any other sum of Section 195

expecting valuable comments on this issue

Article Assisstant

Below content was given by Mr. Devesh Thakur
CA Final Student-Article Assistant
[ Scorecard : 95]

Currently, remittances to non-residents are allowed by banks if the person making the remittance furnishes an undertaking, accompanied by a certificate from a Chartered Accountant (“CA”) certifying the rate for withholding tax as per section 195 of the Act. The banks then forward the certificates to the Reserve Bank of India (“RBI”), which in-turn forwards it to the Income tax department.

Finance Act, 2008 inserted a new sub section (6) to section 195 effective from April 1, 2008, which requires the person responsible for making payment to a non-resident to furnish information relating to such payments in forms to be prescribed. The Central Board of Direct Taxes (“CBDT”) has now, by notification No 30/2009 dated March 25, 2009, prescribed a new rule 37BB in the Income Tax Rules, 1962 (“the rules”) prescribing Form 15CA and Form 15CB to be filed in relation to remittances to non-residents under section 195(6) of the Income Tax Act, 1961 (“the Act”). This new rule is effective from July 1, 2009 and shall apply to all remittances being made after July 1, 2009. The process that will have to be followed, before any remittance can be made, is as under—



Step 1 : Obtain a certificate from a Chartered Accountant in Form No 15CB


Step 2:Furnish the information in Form No15CA



Step 3:Electronically upload Form 15CA on the designated website


Step 4:Take Print out of Form 15CA and file a signed copy


Step 5:Remit money to the Non Resident


Please note that all the above steps have to be undertaken before remittance of money to the non-resident.


Notification no. 30/2009 is as below:-

In exercise of the powers conferred by section 295 read with sub-section (6) of section 195 of the Income-tax Act, 1961, the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 1962, namely:-

1.    (1) These rules may be called the Income-tax (Seventh Amendment) Rules, 2009.

(2) They shall come into force with effect from 1st July, 2009.

2.    In the Income-tax Rules, 1962, after rule 37BA, the following rule shall be inserted, namely:-



“Furnishing of information under sub-section (6) of section 195.

37BB. (1) The information under sub-section (6) of section 195 shall be furnished by the person responsible for making the payment to a non-resident, not being a company, or to a foreign company, after obtaining a certificate from an accountant as defined in the Explanation to section 288 of the Income-tax Act, 1961.

(2) The information to be furnished under sub-section (6) of section 195 shall be in Form No. 15CA and shall be verified in the manner indicated therein and the certificate from an accountant referred to in sub-rule (1) shall be obtained in Form No. 15CB.

(3) The information in Form No. 15CA shall be furnished electronically to the website designated by the Income-tax Department and thereafter signed printout of the said form shall be submitted prior to remitting the payment.

(4) The Director-General of Income-tax (Systems) shall specify the procedures, formats and standards for ensuring secure capture, transmission of data and shall also be responsible for the day-to-day administration in relation to furnishing the information in the manner specified.

FORM NO. 15CA- Download

FORM NO. 15CB- Download

Finance Manager

Many thanks for your reply.

Section 195 provides for certain categories of payment ie. royalty, fees, dividend and interest the withholding tax to be deducted - But i would like to comment on " any other sum "


Import is not 'Other Sum'. The remittance for import is done against Form A1 of RBI and usually shipping documents come to the banks against L/C or D/P (CAD) Terms and you retire the documents against the payment and give your bank Form A1 and Bill of Entry for Customs. If Bill of entry is not there you are giving an undertaking as per FEMA to your bank that you will furnish it within 90 Days of remittance. The contract is clearly on a Principal to Principal basis and no income is deemed to arise in India.

A situation does come up when you send Advance money for import without any B/L or anything in your hand. It is clean. For this also you fill Form A1 and give the same undertaking to your Bank.

Your Bank has nothing to prove entry of goods at the time of making remittance in absence of bill of entry. Therefore now for all remittance the Form 15CB is required from CA as an additional check that the remittance is indeed what it is purported for even though there is no TDS. CA has to see your Purchase order, contract etc. to verify. Even a proforma invoice from seller. He has to basically satisfy that it is a Principal to Principal transaction.

You have to generate form 15CA for all your remittances so your AO has a track of all payments you remit abroad and it is also basically an undertaking to your AO duly verified by you that in case of short deduction you will pay the tax with interest and penalty. If you read the 15CA you will find this verification in it.

For remittances other than imports you fill Form A2 and your CA also has to verify that your TDS rate is correct. Whether the payee has a PE or not, incomes for certain sums like interest, royalties, included professional services (technical, legal, accounting, managerial, secretarial) are deemed to accrue in India. However our Section 9 has specified a rate of 20% for these and most of the DTAAs have also specified this rate in Article 12. With some countries this rate is 15%. If you are bearing the 20% tax yourself, you have to bear 25% on grossed up basis. The CA has to certifiy the correctness iof this in Form 15CB and basis.

If owing to Article 5 of DTAA or even in Section 9 if any of the sum is not deemed to accrue in India you are not to deduct tax. CA has to certify that. If any sum is deemed to accure as income in India the CA has to quantify it also and the deduction will be FOR OTHER SUMS at the following rates:-

If payee is individual, the highest slab rate applicable to the individuals.

If company, then the rate applicable to foreign companies.

As usual, if you bear the tax, you gross up.

CA has to certify all this in the Form 15CB the applicable rates etc. and amount even if grossed up. Based on 15CB you fill 15CA

A lot of responsibility has been put on the CA to check agreements and the transaction data for the purported transaction. This is also due to provisions of Money Laundering. No Government wants proceeds of crime to move through banking channels. Criminals would be only too happy to move money at 20% tax rather than having full cash confiscated at check points. Involving a CA is a sort of a check to create an audit trail.



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