Form 15CA/15CB: paying a foreign vendor from India without TDS trouble.

The certificate-and-declaration pair behind every foreign remittance — when each is needed, treaty rates, and the documents to keep ready.

Almost every payment from India to a foreign party runs into Forms 15CA and 15CB. They are simple once you know which applies — and a source of avoidable delay when you don't.

15CA vs 15CB — who files what

• Form 15CB is a Chartered Accountant's certificate on the remittance: nature of payment, taxability, treaty rate and TDS.
• Form 15CA is the remitter's declaration, filed online with the tax department, often referencing the 15CB.

The bank will not process the foreign remittance without the right combination.

When you can skip them

Not every remittance needs both. A specified list of payments (Rule 37BB) is exempt, and for small remittances up to ₹5 lakh in aggregate in a financial year, only Form 15CA (Part A) is needed — no 15CB. Above that, or for taxable payments, the CA certificate is generally required.

Treaty rates, TRC and Form 41 (Form 10F)

To apply a DTAA rate (often lower than domestic TDS), the recipient typically needs a Tax Residency Certificate, Form 41 (Form 10F), and — where relevant — a No-PE declaration. Missing these forces the higher domestic rate and a refund chase later.

Common payments and their position

Software, royalties, technical services, dividends, interest and reimbursements each have their own characterisation — and characterisation drives the rate. Reimbursements and pure cost-recoveries are frequently over-taxed for want of documentation.

Which part of 15CA applies

• Part A — taxable remittances up to ₹5 lakh aggregate in the financial year: self-declaration only, no CA certificate.
• Part B — taxable, above ₹5 lakh, where you hold a lower/nil-withholding order from the tax officer (Section 195(2)/(3) or 197).
• Part C — taxable, above ₹5 lakh, backed by a Form 15CB — the standard case for vendor payments, royalties and service fees.
• Part D — remittances not chargeable to tax at all.

And the full exemption: the Rule 37BB specified list — import payments, foreign travel, education and other listed categories — needs no 15CA or 15CB at all. Banks sometimes ask anyway; pointing to the rule usually resolves it.

The software-payment turn

Since the Supreme Court's Engineering Analysis ruling (2021), payments to foreign vendors for standard software licences and SaaS subscriptions are generally not “royalty” under India's treaties — meaning no TDS for most treaty-country vendors without a PE in India. Filed correctly (Part D or a nil-TDS 15CB with the treaty reasoning), a large class of routine tech payments moves without withholding. Many companies still deduct 10–20% out of habit — real money handed to the department for their vendor to reclaim, or absorbed as a grossed-up cost.

Grossing up: who bears the tax changes the tax

If the contract says the vendor receives its price net of Indian tax, Section 195A makes you gross up — a $10,000 net-of-tax invoice at a 10% treaty rate costs you about $11,111, with $1,111 as TDS. Negotiating tax-bearing clauses before signing is cheaper than discovering them at remittance time.

What it costs to get wrong

Remitting without the required forms invites a ₹1 lakh penalty per default (Section 271-I), and under-withholding makes you an assessee-in-default for the tax, interest, and — harshest in practice — disallowance of the expense under Section 40(a)(i) until the tax is made good. The bank's refusal to remit is the gentlest failure mode.

The documents to keep on file

For every treaty-rate remittance: the vendor's Tax Residency Certificate for the year, electronic Form 41 (Form 10F), a no-PE declaration, the invoice and contract, and the 15CB working papers. Check your corridor's rates on the DTAA rate checker.

How Advisory Monks Consulting helps

Our Cross-Border Tax desk certifies 15CB, files 15CA, builds the treaty position with TRC/Form 41 (10F) support, and turns routine remittances around in a couple of working days.

General information, not advice.

This note is general guidance, not tax or legal advice. Positions depend on your specific facts — speak with a partner before acting.