Form 15CA & 15CB: Guide to Paying International SaaS and Contractors

Why Does India Regulate Outward Payments?

When an Indian freelancer, startup, or established business makes a foreign currency payment (outward remittance) to an overseas supplier, contractor, or service provider, the Reserve Bank of India (RBI) and the Income Tax Department step in. Under Section 195 of the Income Tax Act, 1961, any person making a payment to a non-resident must deduct withholding tax (TDS) if the payment is taxable in India.

To ensure that tax is deducted before the money leaves India, banks (Authorized Dealers) will refuse to process wire transfers, Stripe payouts, or credit card charges for overseas business expenses unless you provide declarations called Form 15CA and Form 15CB.

Understanding Form 15CA and Form 15CB

• Form 15CA: A declaration filed online by the remitter (you) on the income tax e-filing portal. It contains transaction details, payment value, and confirmation of whether tax was deducted at source.
• Form 15CB: A certificate issued and signed by a practicing Chartered Accountant (CA). The CA certifies the nature of the remittance, whether the payment is taxable, the correct TDS rate as per domestic laws or DTAA treaties, and the applicability of Double Taxation relief.

Filing Rules Based on Payment Thresholds

You do not need both forms for every payment. The rules depend on the annual amount and whether the transaction is taxable in India:

Scenario	Form 15CA Requirement	Form 15CB Requirement	Action Required
Payments under ₹5 Lakhs (cumulative in a fiscal year)	Mandatory (Part A of Form 15CA)	Not Required	File Part A online on the income tax portal. No CA signature needed.
Payments over ₹5 Lakhs & Taxable in India	Mandatory (Part C of Form 15CA)	Mandatory	1. CA uploads Form 15CB. 2. You accept the 15CB and file Part C of Form 15CA.
Payments over ₹5 Lakhs & Not Taxable (Exempt)	Mandatory (Part D of Form 15CA)	Not Required	File Part D online. No CA signature needed, provided payment code is in the specified list of exempt transactions.

Step-by-Step Outward Remittance Workflow

If you are paying a foreign subcontractor or buying software tools costing more than ₹5 Lakhs annually, follow this process to get the remittance cleared:

Step 1: Collect Vendor Documentation

Ask the foreign recipient for the following files. These are critical for your CA to determine taxability:

• Invoice: Showing description, amount, currency, and address of the vendor.
• Tax Residency Certificate (TRC): Issued by their country's tax department (proving they pay tax locally).
• No PE (Permanent Establishment) Declaration: A statement from the vendor confirming they do not have a physical office, employees, or permanent base of operations in India.

Step 2: CA Uploads Form 15CB

1. Provide the vendor documentation to your Chartered Accountant.
2. The CA logs into the income tax portal using their CA credentials, fills in Form 15CB, signs it using their Digital Signature Certificate (DSC), and submits it.
3. A unique UDIN (Unique Document Identification Number) is generated for the certificate.

Step 3: Submit Form 15CA

1. Log in to your business account on the Income Tax e-Filing Portal.
2. Navigate to e-File > Income Tax Forms > File Income Tax Forms and select Form 15CA.
3. Select Part C (if linking to a 15CB).
4. Enter the CA's Form 15CB acknowledgement number and UDIN. The form will pull the certified tax details automatically.
5. Submit and verify the application using Aadhaar EVC or DSC.
6. Download the submitted Form 15CA PDF.

Step 4: Execute Bank Transfer

Send the Form 15CA PDF, the Form 15CB PDF, and the original invoice to your bank's foreign exchange department. The bank will review the documentation and execute the transfer, releasing the foreign exchange to the vendor.

Reference Link: Income Tax Rules for Foreign Remittance - incometaxindia.gov.in