How to File Form 15CA: Step-by-Step Guide?

Many people often need to transfer money abroad for business, education, personal expenses, and more. In India, people must file Form 15CA with the Income Tax Department before sending money for most foreign remittances. This form keeps a record of taxable payments to check proper tax compliance. It is important to file this form correctly to save time, prevent penalties, and keep the transaction secure. Both businesses and individuals can securely maintain payments with proper filing. In this blog, you will learn how to file Form 15CA.  

What is Form 15CA?

Form 15CA refers to a key declaration form under the Income Tax Act in India. This form is required for an individual or business to make a remittance (payment) to a non-resident or foreign company. The purpose of this form is to help the government track foreign payments and avoid penalties. It also confirms that the tax is deducted at source (TDS) before transferring money outside India. A person must file this form online through the Income Tax e-Filing Portal. In most cases, banks usually do not allow outward remittances without Form 15CA and sometimes Form 15CB.

Types of Form 15CA

There are four types of Form 15CA:

1. Part A

Part A is used if the total foreign remittance in a financial year is within Rs. 5 lakh and the payment is chargeable to tax in India. If a person makes the payment, they must submit the details like the name and address of the remitter and remittee, nature and purpose of the remittance, amount of remittance, and basic tax details. In this case, you do not need a certificate from a Chartered Accountant or the Assessing Officer. This helps to keep the process simple for small transactions and meets tax rules.

2. Part B

Part B is applicable if the remittance is more than Rs. 5 Lakh in a financial year. It is also required when the Assessing officer issues a certificate or order to the remitter under Section 195(2), Section 195(3), or Section 197 of the Income Tax Act. This certificate confirms the exact tax amount that is to be deducted or states that there is no tax is required. This type of form also confirms that large remittances comply with the tax clearance rules from the Income Tax Department.

3. Part C

Part C is useful if the remittance is more than Rs. 5 lakh in a financial year and the remitter does not have a certificate from the Assessing Officer. In this situation, the remitter must obtain a Form 15CB certificate from a Chartered Accountant (CA). The CA verifies the details of the remittance, the relevant Double Tax Avoidance Agreement (DTAA) (if applicable), the applicable provisions of the Income Tax Act, and the rate and amount of tax deduction. It allows the Income Tax Department to track proper tax for high-value payments abroad.

4. Part D

Part D of Form 15CA is applicable if the remittance is not chargeable to tax in India. This happens when the payment is exempt under the Income Tax Act, such as certain personal remittances, imports, or reimbursements. This can also happen if the payment is exempt under a Double Tax Avoidance Agreement (DTAA). In such cases, no tax liability arises. The remitter is only required to provide the details of transactions for record-keeping. Examples can include remittances for travel expenses, gifts, education fees, and payments for imported goods where no tax applies.

Why is Form 15CA Important?

Here is a list of the key importance of Form 15CA:

• Prevents tax evasion

Form 15CA gathers complete details about foreign payments. It can include the amount, the purpose, and whether tax has been deducted. This helps the Income Tax Department to track the flow of money leaving India and confirm that taxes are paid when required. It closes gaps that could allow individuals or businesses to avoid tax. This prevents chances to avoid tax by individuals or businesses.

• Ensures legal compliance

If you file Form 15CA, you will be able to meet the rules of the Income Tax Act, the guidelines of the Reserve Bank of India (RBI), and the Foreign Exchange Management Act (FEMA). These rules help to maintain the flow of money from India. It confirms that every payment abroad follows Indian tax and foreign exchange regulations.

• Required for bank processing

In India, the Bank receives Form 15CA but fails to process foreign remittances. This form serves as proof that the payment meets tax and legal obligations. This form will help to send the money, even if all documents are ready.

• Avoids penalties and legal trouble

If you do not file Form 15CA when needed can lead to penalties from the Income Tax Department. In some cases, it can also lead to legal action. As a payer, you must file this form on time to avoid unnecessary fines and manage a lawful transaction.

• Promotes transparency in transactions

Form 15CA provides clear and accurate payment information to the authorities. This helps to build a transparent record of cross-border payments. This supports audits, financial statements, and trust with the government.

How to File Form 15CA?

Below is the step-by-step process to file Form 15CA:

Step 1: Log in to the Income Tax Portal

Firstly, you must visit the official Income Tax Portal to file Form 15CA. You can use your Permanent Account Number (PAN), password, and captcha code to access your account. This step confirms that only authorised users can file this form securely.

Step 2: Go to the E-File Section

Once you have successfully logged in, you must click on the “e-File” option from the top menu. Next, you need to select the “Income Tax Forms” option and then click on the “File Income Tax Forms” option. This section contains all the forms available for online submission.

Step 3: Choose Form 15CA

In the list of forms, search for Form 15CA. Once you find it, click on “File Now”. This step directs you to the online form where you provide the required details.

Step 4: Select the Correct Part of Form 15CA

Form 15CA has four parts, and each applies to different types of remittances:

• Part A: It is applicable for taxable remittances below Rs. 5 lakh in a financial year.
• Part B: This part is useful for taxable remittances above Rs. 5 lakh when an order or certificate under Section 195(2), 195(3), or 197 exists.
• Part C: Part C is for taxable remittances above Rs. 5 lakh with a Chartered Accountant’s certificate in Form 15CB.
• Part D: Part D is for remittances that are not taxable under the Income Tax Act.

Step 5: Fill in the Required Details

Enter details of the sender (remitter), receiver (remittee), amount, country, payment type, and TDS information if applicable. Check every field carefully before moving ahead.

Step 6: Submit and Verify

Once you have completed the form, submit it online. Verification can be done with a Digital Signature Certificate (DSC) or an Electronic Verification Code (EVC).

Step 7: Download Acknowledgement

Once submitted, you can download the acknowledgement receipt (Form 15CA download). Keep it safe for records and provide it to your bank. Banks usually do not process foreign remittances without this form.

Conclusion

Filing Form 15CA is an important requirement when sending money abroad from India. It ensures compliance with Indian tax laws and helps avoid penalties. A person should understand the purpose of the form and select the correct part of the form based on the payment details to complete the process smoothly. You need to keep all the required documents ready and get help from a qualified Chartered Accountant. This will help to make international transactions smooth, safe, and fully follow government rules.  If you have any queries about filing Form 15CA, contact Online Legal India to get assistance.

FAQ

Q1. What is Form 15CA, and why is it required?

Form 15CA is an online declaration that must be filed before sending money abroad. It helps the Income Tax Department track foreign remittances and check if tax is applicable under the Income Tax Act or the Double Taxation Avoidance Agreement (DTAA). Banks also need this form to process overseas payments.

Q2. Who needs to file Form 15CA?

Any person or business in India making a payment to a foreign party (outside India) may need to file Form 15CA. However, individuals sending money abroad under the Liberalised Remittance Scheme (LRS), such as for education, medical treatment, or travel, usually do not need to file it unless tax is applicable.

Q3. How many parts does Form 15CA have, and when are they used?

Form 15CA has four parts, including Part A, Part B, Part C, and Part D. Each part is applicable depending on the remittance amount, tax liability, and whether a CA certificate or Assessing Officer approval is available.

Q4. When is Form 15CA not required?

Form 15CA is not required in two cases:

• If the remittance falls under the exempt list specified by the Income Tax Department (such as imports, travel, gifts, etc.).
• If the remitter is an individual under LRS, and the payment does not need prior RBI approval.

Q5. What happens if Form 15CA is not filed before remittance?

Failure to file Form 15CA before making the payment may result in penalties and delays in processing the remittance through the bank.