What is Form 15CB and when is it needed?
It is a certificate on the tax treatment of a payment leaving India: whether the payment is chargeable to Indian tax, on what basis, and what should be withheld before it goes. It is not an audit of the business and not a valuation. It is a signed opinion on one transaction, given to a bank that is about to release funds. Because it attaches to a specific remittance, it identifies the payee, the amount and the basis relied on. The certificate is what allows the bank to act without forming a tax view of its own, which is why the request comes with a banking deadline.
Who is allowed to sign Form 15CB?
An accountant in practice in India signs it. The signature carries an opinion on a tax position, so the person signing has to be satisfied about the facts behind it: the contract, the residence of the payee, the character of the income. That is not the same as transcribing what the remitter has written on a request form. A certificate produced from a one-line instruction and an amount is the certificate that causes trouble later, because nothing behind it was ever examined. Expect questions before a signature, and treat the questions as the work rather than as an obstacle to the transfer.
Why does my bank want a certificate before releasing my money?
The bank is being asked to move money out of the country and has no way to decide, by itself, whether Indian tax should have come off it first. Rather than form that view, it requires a signed opinion from somebody who can. So the certificate is really addressed to the bank's own risk, which explains both the deadline attached to it and the fact that a transfer stops dead without it. It also explains the tone of the request. The branch is not negotiating the tax position with you; it is checking that a document exists in the form it is required to hold.
What documents does the accountant need to issue the certificate?
The contract or agreement behind the payment, the invoice, evidence of who the payee is and where they are resident for tax, and anything relied on to claim a treaty rate instead of the domestic one. If an exemption or a reduced rate is being claimed, the evidence for it is the point of the file rather than an afterthought. Where the payment recurs, assemble the residence and ownership evidence once and keep it current, because a certificate is issued for each remittance and the same questions come back every time. Gaps in the pack are the usual reason a certificate is delayed.
Can Form 15CB be issued after the money has been sent?
The sequence is the point. The certificate exists so that the tax position is settled before the funds move, and a document produced afterwards cannot do that job however accurate it turns out to be. If a remittance has already gone without one, the honest route is to establish what the correct treatment was, deal with any shortfall in the amount withheld, and record the position properly rather than manufacture comfort after the event. Banks keep their own record of what they released, so the transaction is not invisible. Fixing the substance is worth more than a certificate describing a decision nobody actually made.
Is a certificate needed for every payment leaving India?
No, and the exceptions are the part worth learning. Some payments are not chargeable to Indian tax at all, and some categories sit outside the requirement whatever the amount. What you cannot do is decide by feel, because the carve-out depends on the nature of the payment rather than on how routine it seems to the person making it. Establish the character of the payment first and the certificate question tends to answer itself. The cost of getting this wrong is asymmetric: an unnecessary certificate is a fee, while a missing one is a stopped transfer and an argument about withholding.
What happens if the two countries disagree about which of them can tax me?
The treaty has a procedure for exactly that. You apply to the competent authority in your residence country, which takes the case up with its counterpart, and the two negotiate a position that removes the double taxation. Some treaties add binding arbitration if they cannot agree. It is slow and it runs on documents, so the practical work is preserving the record and filing protective claims while the clock runs. See our treaty work.
Do I get credit for all of the foreign tax I paid?
Only up to your own country's tax on that same income, and only for tax you were legally obliged to pay. Two consequences follow. Living somewhere that taxes you more heavily than your residence country does leaves an excess that becomes a carryover rather than a refund. And withholding suffered above the treaty rate is not creditable — the route back to that money is a refund claim in the country that took it. See claiming the credit.
