Common Mistakes to Avoid in Form 15CA and 15CB Filing


Filing Form 15CA and 15CB is a mandatory process under the Indian Income Tax Act for individuals and entities making payments to non-residents. These forms help the Income Tax Department monitor foreign remittances and ensure that applicable taxes have been deducted before transferring funds outside India.

However, due to complex rules and frequent changes in regulations, taxpayers often make errors during submission. These mistakes can lead to delays, penalties, or even non-compliance notices from authorities. In this blog, Legal N Tax India explains the most common mistakes to avoid while filing Form 15CA and 15CB, ensuring smooth processing and full compliance.

Understanding Form 15CA and Form 15CB

Before identifying mistakes, it’s essential to understand the difference between these two forms:

  • Form 15CA: This form is a declaration made by a person making a payment to a non-resident. It records details such as the nature of payment, amount, and applicable taxes deducted.

  • Form 15CB: This is a certificate issued by a Chartered Accountant (CA) verifying that the tax deduction and remittance comply with the provisions of the Income Tax Act and Double Taxation Avoidance Agreement (DTAA), if applicable.

Both forms must be filed electronically through the Income Tax portal before the actual remittance is made.

Common Mistake 1: Incorrect Classification of Payment

One of the most frequent mistakes taxpayers make is misclassifying the type of payment being made to a non-resident. The Income Tax Department has specific codes and categories for various types of transactions—such as professional fees, royalties, technical services, or import payments.

Selecting the wrong payment category can lead to incorrect tax deductions and mismatched reporting between Form 15CA and 15CB. Always verify the correct nature of payment under the relevant section of the Income Tax Act before filing.

Common Mistake 2: Ignoring the Need for a Chartered Accountant Certificate

Many taxpayers mistakenly assume that Form 15CB is optional. In reality, it is mandatory for most taxable foreign remittances. Only specific cases—such as payments covered under Rule 37BB exemptions—do not require a CA certificate.

Filing Form 15CA without the accompanying Form 15CB when required can cause rejection of the remittance by banks or trigger compliance scrutiny from the authorities.

Common Mistake 3: Mismatched Information Between 15CA and 15CB

The details entered in Form 15CA must exactly match those in Form 15CB. Discrepancies in information such as amount, purpose of payment, country of remittance, or tax rate can lead to processing errors.

Before submission, always cross-verify that both forms contain identical data. Even minor inconsistencies can lead to rejection by the authorized dealer (bank) handling the foreign transfer.

Common Mistake 4: Using Outdated or Incorrect DTAA Provisions

Taxpayers often fail to apply the correct tax rate under the Double Taxation Avoidance Agreement (DTAA) between India and the recipient’s country. This may result in excessive tax deduction or underpayment of taxes.

To avoid this, always consult the latest DTAA provisions and ensure that you have the necessary documents—like tax residency certificates—from the foreign beneficiary.

Common Mistake 5: Failure to Obtain Supporting Documents

Banks and the Income Tax Department may request supporting documentation, such as invoices, agreements, or payment justifications, for remittances. Submitting Form 15CA and 15CB without proper documentation can delay approvals.

Ensure all relevant papers are available, signed, and uploaded wherever required.

Common Mistake 6: Late or Incorrect Submission

Another frequent issue is the delay in filing forms or submitting them after making the payment. Both Form 15CA and 15CB must be filed before the remittance.

Late filing can lead to penalties under the Income Tax Act and may result in complications when reconciling foreign transactions during audits.

Common Mistake 7: Ignoring Revisions and Amendments

The Income Tax Department frequently updates filing procedures, online forms, and technical requirements. Using outdated information or older formats of 15CA CB form can cause rejections.

Always check the latest guidelines on the official Income Tax e-filing portal before preparing your forms.

Common Mistake 8: Not Downloading and Keeping Copies

After successful submission, taxpayers must download Form 15CA and the digitally signed Form 15CB for recordkeeping. Failure to maintain these documents can create problems during audits or when the department requests verification.

Keeping a secure digital and physical copy of both forms helps in demonstrating compliance and transparency during any future inquiries.

Common Mistake 9: Incorrect PAN or TAN Details

Incorrect Permanent Account Number (PAN) or Tax Deduction and Collection Account Number (TAN) details are common yet serious errors. These can invalidate your filing and require re-submission.

Always double-check these identification numbers and ensure they match with your Income Tax records.

Common Mistake 10: Lack of Professional Assistance

Many taxpayers attempt to file these forms without consulting experts, leading to procedural errors. Professional assistance ensures accuracy, compliance, and timely submission.

At Legal N Tax India, experienced professionals assist with the entire Form 15CA and 15CB process—from data verification and tax computation to digital submission and recordkeeping.

How Fundraising Advisory Services Connect with Compliance

For NGOs and charitable organizations, compliance is just as crucial in financial reporting as it is in foreign remittance. Proper documentation through Form 15CA and 15CB ensures transparency in international donations and fund transfers.

Legal N Tax India also provides Fundraising Advisory Services, helping organizations align their financial inflows with regulatory requirements. Whether it’s obtaining approvals for cross-border donations or filing necessary forms, the process must be error-free to maintain donor trust and legal compliance.

In addition to advisory, Legal N Tax India offers Post Fundraising Support Services, ensuring funds are utilized effectively and reported accurately. As a professional fundraising consulting firm, it assists NGOs in maintaining compliance with both domestic and international financial regulations. Through its specialized Fundraising Advisory Services for NGOs, organizations can streamline documentation, enhance accountability, and avoid common compliance pitfalls.

Best Practices to Ensure Error-Free Filing

  1. Verify all details before submission, including the remittance amount and beneficiary information.

  2. Consult a qualified Chartered Accountant to confirm the applicable tax rate under the DTAA.

  3. Maintain detailed documentation for every foreign transaction.

  4. Stay updated with the latest Income Tax notifications and online portal changes.

  5. Use professional support for preparation, submission, and audit readiness.

Conclusion

Filing Form 15CA and 15CB is an essential compliance step for anyone making payments to non-residents. Small errors—like data mismatches, incorrect tax rates, or missing certificates—can lead to significant consequences. By avoiding these common mistakes and following a structured approach, taxpayers can ensure smooth and error-free foreign remittance.

Whether you are an individual, business, or NGO managing international funds, professional guidance is invaluable. Legal N Tax India simplifies compliance through accurate filing, documentation, and expert advisory.

For assistance with Form 15CA and 15CB, fundraising advisory services, or post fundraising support services, contact:

Email: legalntaxindia0@gmail.com
Website: www.legalntaxindia.com

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