15CA/15CB Certification

Every outward remittance from India that is chargeable to tax in the hands of a non-resident clears two regulatory gates before the Authorized Dealer (AD) bank releases funds: Form 15CA (the remitter's online declaration under Rule 37BB) and, where applicable, Form 15CB (a Chartered Accountant's certificate on taxability, Section 195 TDS, and DTAA relief). Get either one wrong and the bank holds the wire.

At a Glance

• Threshold: ₹5 lakh aggregate per financial year decides whether a CA certificate is needed.
• Applicable law: Section 195 of the Income-tax Act, 1961 + Rule 37BB + Section 90 (DTAA) + FEMA Schedule III.
• Turnaround: 3-7 working days for standard cases; 2 working days for recurring remittances under standing engagement.
• CA certificate: Form 15CB with UDIN, e-signed on the Income Tax portal.
• Penalty for default: ₹1,00,000 per default under Section 271-I plus Section 201 exposure on the deductor.

What's New for FY 2026-27

Five changes have materially altered how 15CA/15CB filings are processed since FY 2024-25 closed. Each one shows up at the bank counter, not on the portal — so the remitter only learns there is a problem after the wire is held.

• Real-time AIS validation: AD bank desks now query the Annual Information Statement at the point of submission; TDS not yet reflected in the AIS causes the file to be parked.
• Form 10F e-filing enforcement: manual Form 10F has been refused since April 2023, and the no-PAN portal facility for foreign recipients is now the default channel.
• LTCG regime on property (Section 112): 12.5% without indexation for transfers on or after 23 July 2024 — older indexation-based computations are rejected at the 15CB stage.
• LRS threshold at ₹10 lakh: the TCS-free ceiling is ₹10 lakh per financial year for all purposes from 1 October 2024, carried into FY 2026-27.
• Cumulative LRS dashboard: AD banks share a real-time LRS aggregate; the USD 250,000 cap is enforced across banks, not per bank.

Which Part of Form 15CA Applies

Rule 37BB carves every remittance into one of four Parts. The applicable Part turns on three questions: is the aggregate above ₹5 lakh in the financial year, is the income chargeable to tax in India, and has an AO order been obtained?

• Part A — Aggregate up to ₹5 lakh. Online declaration only. No CA required.
• Part B — Above ₹5 lakh with an Assessing Officer order under Section 195(2), 195(3), or 197 fixing a lower or nil rate.
• Part C — Above ₹5 lakh, transaction is taxable, no AO order. Form 15CB by a CA is mandatory before 15CA can be filed.
• Part D — Above ₹5 lakh but not chargeable to tax in India. Declaration only — most LRS personal remittances sit here.

Wrong Part is the single biggest failure mode. A Part-A declaration cannot cure a transaction that was actually taxable and required Part C — the remitter still owes the TDS, interest, and the Section 271-I penalty.

Remittances on the 33 specified-list categories in Rule 37BB (business travel, indents on imports, advances against exports) need no 15CA at all, but the FETERS purpose code still flows from the AD bank to the RBI.

Common Scenarios We Certify

NRI Selling Immovable Property in India

The buyer deducts TDS under Section 195 at the long-term capital gains rate (12.5% for transfers on or after 23 July 2024, indexation withdrawn) or the slab rate for short-term gains, plus surcharge and cess. Form 26QB does not apply to NRI sellers — the buyer needs a TAN and files Form 27Q quarterly.

Where Section 54, 54EC, or 54F reinvestment will reduce the actual gain, we file a Section 197 application for a lower-deduction certificate. Repatriation of sale proceeds from the NRO account then runs through Form 15CA Part C and Form 15CB.

Annual NRO to Foreign Account Repatriation

FEMA permits repatriation up to USD 1 million per financial year from NRO balances — current income, asset sales, inheritance, or matured investments. Each tranche is a separate 15CA/15CB transaction. The cumulative USD 1 million ledger must be tracked across every AD bank the NRI uses.

Royalty, FTS, and Software Payments

Classic Section 195 cases. The Act's headline 20% under Section 115A is compared against the DTAA rate (typically 10%-15%) and the lower applies — but only if the recipient furnishes a Tax Residency Certificate and an e-filed Form 10F.

Software payments need separate analysis under the Engineering Analysis Centre of Excellence Supreme Court ruling to decide whether the payment is royalty or business income; the treaty answer often turns on that one classification.

Dividend, Interest, ECB, and FDI Exit

Dividend to a non-resident shareholder: 20% under the Act, reduced to 5%-15% under most DTAAs. ECB interest under Section 194LC: concessional 5% subject to conditions. FDI exit through share transfer needs Form FC-TRS in parallel with 15CA/15CB, and the arm's-length price needs a Rule 11UA valuation from a merchant banker or CA.

LRS Personal Remittances (Education, Medical, Maintenance, Gifts)

Resident individuals can remit up to USD 250,000 per financial year under LRS. Most LRS transactions sit in Part D, but they trigger TCS in the remitter's hands under Section 206C(1G). The TCS rates for FY 2026-27 are summarised below.

Four Conditions for DTAA Relief

A treaty rate is not automatic. Apply the lower rate only when all four are in place:

1. Tax residency — the recipient is a tax resident of a country with which India has a DTAA in force.
2. Valid TRC — issued by the foreign tax authority, covering the period the income arose, in the recipient's legal name.
3. E-filed Form 10F — filed electronically on the Income Tax portal (manual Form 10F has not been accepted since April 2023).
4. Beneficial ownership — evidence that the recipient receives the income on its own account, not as a conduit for a non-treaty parent.

Missing any one of the four collapses the DTAA claim. The deductor — not the foreign recipient — carries the recovery exposure under Section 201.

TCS on LRS — FY 2026-27 Rates

The ₹10 lakh per financial year threshold (raised from ₹7 lakh effective 1 October 2024) carries into FY 2026-27. The AD bank collects TCS at the point of remittance under the remitter's PAN; the credit appears in Form 26AS.

• Up to ₹10 lakh (all purposes): Nil.
• Education funded by a specified-institution loan: Nil, irrespective of amount.
• Education above ₹10 lakh (other funding): 5%.
• Medical treatment above ₹10 lakh: 5%.
• All other LRS purposes above ₹10 lakh: 20%.

Wrong purpose-code selection at the bank causes wrong TCS collection. Where an education loan is in play, the sanction letter and account details must reach the bank before remittance to suppress TCS at source.

Where Bank Submissions Get Rejected

AD bank compliance desks have tightened scrutiny since the 2024 FEMA contravention notices on under-documented NRI repatriations. The recurring failures:

• Wrong FETERS purpose code on Form A2 versus the 15CA narrative.
• TRC mismatch on period, legal name, or language (no apostilled translation).
• Form 10F not e-filed or filed under a different PAN.
• PAN-AIS reconciliation gap — TDS challan not yet reflected in the AIS at the time of 15CB signing.
• Beneficial-ownership gap where funds flow through a treaty-favourable entity to a non-treaty parent.
• Stale board resolution for corporate remitters — bank desks want it dated within six months.
• LRS aggregate breach across multiple AD banks — the system now blocks the cumulative excess.
• Under-collected TCS on prior LRS tranches in the same financial year.

Penalty Exposure if You Get It Wrong

Section 271-I: ₹1,00,000 per default for failing to furnish Form 15CA or furnishing inaccurate particulars in 15CA or 15CB. Leviable on the remitter.

If TDS under Section 195 is not deducted or short-deducted, the remitter becomes an assessee-in-default under Section 201 — liable for the tax, interest at 1% per month under Section 201(1A), and a penalty equal to the tax under Section 221. The corresponding expense is disallowed under Section 40(a)(i) in business income computation — a disallowance often larger than the TDS itself.

FEMA contraventions are separately compoundable under Section 13 — up to three times the sum involved where quantifiable, or up to ₹2 lakh where not, plus ₹5,000 per day for continuing contraventions.

Worked Example: NRI Selling a Mumbai Flat

An NRI based in Singapore sells a Mumbai flat for ₹3.2 crore on 15 May 2026. Indexed cost (no longer available post-23 July 2024) would have produced a long-term capital gain of ₹1.1 crore; under the new Section 112 regime (12.5% without indexation), the gain is ₹1.6 crore.

• Headline TDS under Section 195: 12.5% on ₹3.2 crore consideration = ₹40 lakh (buyer must apply the full-consideration rate unless a Section 197 certificate fixes a lower base).
• Section 197 application: we file for a lower-deduction certificate showing tax on the actual gain of ₹1.6 crore at 12.5% = ₹20 lakh, with the buyer instructed to deduct only the certified amount.
• Surcharge and cess: 12% surcharge on the LTCG component plus 4% cess — built into the 15CB working.
• DTAA position: India-Singapore DTAA does not concessionally rate immovable property gains (Article 13(1) — taxable in the source state); no treaty relief available on this transaction.
• Repatriation: after the sale, proceeds enter the NRO account; each tranche of repatriation up to USD 1 million per financial year is a separate 15CA Part C + 15CB filing.

Net result: TDS reduced from ₹40 lakh to ₹20 lakh through the Section 197 route, with the 15CB working paper showing the Article 13 analysis on the DTAA point so the file holds up in scrutiny.

What Sits Behind Each 15CB We Issue

The certificate is the visible artefact. The audit trail is the actual product. Every 15CB is backed by:

• Written taxability opinion citing section and DTAA article.
• Rate-comparison sheet (Act rate vs treaty rate).
• TRC and e-filed Form 10F of the beneficiary.
• TDS challan plus Form 27Q acknowledgement.
• Bank Form A2 and FEMA Schedule classification.
• LRS or USD 1 million NRO ledger position.
• Beneficial-ownership declaration where required.
• UDIN log linked to the certificate.

The file is retained for eight years — the Section 149 reopening limitation under post-Finance Act 2021 timelines — and is produced as-is in any scrutiny, refund proceeding, or RBI inspection.

How to Engage

Send the remittance brief — purpose, amount, currency, beneficiary, country of residence. We revert within 24 hours with the applicable Part, the headline rate, the treaty rate available, and the document list. Then we take the file end-to-end through to SWIFT confirmation.

For recurring flows — monthly royalty, quarterly dividend, periodic vendor payments — we set up a standing engagement with pre-validated templates that compress per-tranche turnaround to two working days.