AS | Ankit Sarawagi|Founder, CFOmatrix·September 2026·8 min read | FEMA & FDI |
Your first foreign vendor bill lands, you go to pay it, and the bank asks for Form 15CA and 15CB before it will release a single dollar. Miss the forms and the money simply does not move.
Every time an Indian company pays a non-resident, the tax law wants to know whether Indian tax should be withheld first. Form 15CA is your declaration of that, and Form 15CB is a chartered accountant’s certificate backing it up. This guide covers when each is needed, when it is not, the specified-list exemptions, the Section 195 link, and the three documents that let you legitimately withhold nil under a tax treaty.
- Form 15CA
- Your online declaration on the income-tax portal, in four parts (A to D), before remitting to a non-resident.
- Form 15CB
- A CA certificate on the taxability, rate and treaty position, needed when a taxable remittance exceeds ₹5,00,000 in the year.
- The tax link
- Both flow from Section 195: TDS on any sum chargeable to tax paid to a non-resident.
- Treaty relief
- A valid TRC + Form 10F + No-PE declaration can bring withholding to nil under many DTAAs.
- Exemptions
- A specified list of 33 items (certain imports and personal remittances) needs neither form.
1 What Form 15CA and 15CB actually are
When you pay a resident vendor, TDS is a familiar routine. When you pay a non-resident, the government adds a checkpoint at the bank, because once the money leaves India it is hard to recover any tax due on it. Forms 15CA and 15CB are that checkpoint.
Form 15CA is an online declaration you file on the income-tax e-filing portal before the remittance. It tells the department the amount, the payee, the nature of the payment and the tax you have or have not deducted. Form 15CB is a certificate from a chartered accountant that examines whether the payment is chargeable to tax in India, at what rate, and whether a tax treaty applies. The bank, acting as the authorised dealer, will not process the outward payment without these.
2 The four parts of Form 15CA
Founders often assume 15CA is one form. It is really four different situations, and you pick the part that fits.
| Part | When you use it |
|---|---|
| Part A | Remittance is taxable and total remittances in the year are up to ₹5,00,000. No 15CB needed. |
| Part B | Taxable remittance where you hold a lower or nil deduction certificate or order from the Assessing Officer under Section 197 or 195(2). |
| Part C | Remittance is taxable and total remittances exceed ₹5,00,000 in the year. A 15CB from a CA is required first. |
| Part D | Remittance is not chargeable to tax in India. Only a short declaration, no 15CB. |
3 When you do not need the forms
Not every foreign payment triggers 15CA/15CB. The rules carve out a specified list of 33 transactions (Rule 37BB) where neither form is required, covering many imports, business travel, personal remittances and similar items where the tax risk is low.
Equally, if a payment is genuinely not chargeable to tax in India, you file only Part D of 15CA rather than a full 15CB. The trap is deciding taxability casually. Deciding that a payment is not taxable without a documented basis is exactly what an assessment later unpicks.
4 The Section 195 link
Forms 15CA and 15CB do not create a tax; they administer one. The underlying charge is Section 392 (old 195) of the income-tax law, which requires TDS on any sum paid to a non-resident that is chargeable to tax in India. The CA issuing 15CB is really answering the Section 195 question: is this sum chargeable, and if so at what rate after any treaty relief.
So the workflow is always: first decide the Section 195 position, then withhold accordingly, then paper it with 15CB and 15CA. Get the first step wrong and the forms simply record the wrong answer neatly.
5 How DTAA relief brings the rate down
This is where real money is saved or lost. A Double Taxation Avoidance Agreement between India and the vendor’s country can cap the rate on royalty or fees for technical services, and can exempt pure business profits where the vendor has no permanent establishment in India. But you cannot simply assume the treaty. You have to hold the evidence.
Brewly, a Bangalore D2C brand, subscribes to a US analytics SaaS billed at USD 1,200 a month by the US parent entity. Without treaty documents, its CA may certify a withholding under Section 195 on the payment. Brewly instead asks the vendor for a US TRC, files Form 10F, and takes a No-PE declaration. On that basis the payment qualifies as the vendor’s business income with no Indian permanent establishment, the 15CB certifies nil withholding, and Brewly files Part C of 15CA. Same bill, but no tax leaked and no expense disallowance risk.
6 The step-by-step before you remit
Run the same sequence every time and the forms stop being a scramble.
7 Your compliance checklist
- For every foreign vendor, decide the Section 195 taxability before paying, not after.
- Collect a valid TRC, file Form 10F, and take a No-PE declaration to claim any DTAA rate.
- Get a 15CB from your CA when a taxable remittance exceeds ₹5,00,000 in the financial year.
- File the correct part of Form 15CA (A, B, C or D) before the remittance leaves.
- Include credit-card payments to foreign vendors in the same process.
- Check whether the payment falls in the specified list of 33 exempt items before assuming forms are due.
- Keep the documents on file; due diligence will ask for them.
Not sure which FEMA and tax filings your foreign payments trigger?
Use our free FEMA/FDI Filing Checker: tell us the transaction and see which forms, from 15CA/15CB to FC-GPR and FC-TRS, you owe and by when.
Check my filings8 FAQs
When is Form 15CB from a CA required?
Do I need to file 15CA/15CB for credit card payments to foreign vendors?
How does a DTAA reduce or remove withholding tax?
What are the parts of Form 15CA?
What happens if I remit without filing 15CA/15CB?
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FEMA & FDI compliance for startups →
FEMA/FDI filing checker (free tool) →
AS | Founder, CFOmatrix | Finance Strategy & Compliance CFOmatrix helps Indian startups build finance, tax and compliance functions that stand up to investor due diligence, from process and controls to the filings and the numbers behind them. |
Disclaimer: This article is general information as of September 2026 and is not tax or legal advice. Forms 15CA and 15CB, Section 195 and the relevant tax treaties can change and depend on the facts of each payment. Confirm your specific position with a qualified professional before remitting.