What is Income Tax Form 15CA?

Income Tax Form 15CA is the mandatory form to be submitted to the income tax department when India business makes the payment outside India.

Every taxpayer in India should file form 15CA when Foreign Remittance is done as it is the basic declaration defining the details of the payment to non-resident or a foreign company.

It is mandatory to submit Income Tax Form 15CA under Income Tax Act. The major reason why Income Tax Form 15CA is mandatory is to helps the Income Tax Department to track the foreign remittances and their classification to determine the taxes due or the tax liability.

Know the purpose of Form 15CA and 15CB

Previously, anyone sending money to a non-resident had to provide a certificate in a format prescribed by the RBI. This was done because anyone earning the income in India should also pay the taxes to the Indian Government.

Furthermore, The primary goal was to collect taxes at the time of remittance or as a TDS (Tax Deducted at Source) because collecting taxes from Non-Residents at a later time can be impossible or less feasible.

As a result, to efficiently monitor transactions and collect taxes, the government implemented e-filing of form 15CA and 15CB instead of the certificates.

Now, The deduction of income tax on payments made to non-residents is made mandatory by Section 195 of the Income Tax Act of 1961. An undertaking (in Form 15CA) and a Chartered Accountants Certificate (in Form 15CB) must be provided by the individual sending the payment to a non-resident individual or a company.

Complete Procedure for filing Form 15CA

The supplying of information in Form 15CA for payment to non-residents who are not companies or to a foreign company has been divided into four components. You will need to fill out the applicable section depending on the situation and the type of remittance.

The following are the parts of Income Tax Form 15CA:

Part A: If the remittance, or the total of such remittances, does not exceed Rs. 5 lakh throughout the fiscal year.

Part B: It has to be filled when the total remittance or a single remittance exceeds Rs. 5 Lakhs during the fiscal year & carry Income Tax NIL or Low Tax Rate Certificate.

Part C: If the remittance, or the aggregate of such remittances, exceeds 5 lakh during the fiscal year and a chartered accountant's certificate in Form No 15CB has been acquired.

Part D: When the remittance is exempt from taxation under the Income Tax Act of 1961.