# Understanding Form 15CA – 15CB for NRO Account Payments

Published: 25 Jun 2024  |  Last updated: 07 Aug 2025
Author: Treelife
Practice area: Finance
Source: https://treelife.in/finance/understanding-form-15ca-15cb-for-nro-account-payments/

## Summary

- AD Bankers require Form 15CA and/or Form 15CB before processing any remittance outside India to a non-resident, as mandated by RBI.
- NRO accounts allow NRIs or persons of Indian origin to hold India-sourced income such as dividends, pension, rent, and sale proceeds in INR.
- Payments to an NRO account do not involve an AD Banker since no funds leave India, but this does not remove the filer's compliance obligation.
- The obligation to file Form 15CA and/or Form 15CB arises from Section 195 of the Income-tax Act, 1961 read with Rule 37BB of the Income-tax Rules, 1962.
- Section 195 requires any person responsible for paying a non-resident or foreign company to file Form 15CA and/or Form 15CB prior to remitting the payment.
- The filing trigger is the act of making a payment to a non-resident, not the physical transfer of funds outside India.
- Payments to NRO account holders for rent or for sale proceeds on transfer of property or shares also attract this filing requirement.
- Non-filing or inaccurate filing of Form 15CA and/or Form 15CB attracts a penalty of ₹1 lakh under the Income-tax Act, 1961.
- Payers should not rely solely on their banker's requirements, since bankers are not involved in NRO-to-resident payments and may not flag the filing need.

---

𝐃𝐨 𝐘𝐨𝐮 𝐍𝐞𝐞𝐝 𝐭𝐨 𝐅𝐢𝐥𝐞 𝐅𝐨𝐫𝐦 15𝐂𝐀 – 15𝐂𝐁 𝐰𝐡𝐞𝐧 𝐦𝐚𝐤𝐢𝐧𝐠 𝐚 𝐩𝐚𝐲𝐦𝐞𝐧𝐭 𝐭𝐨 𝐍𝐑𝐈𝐬 𝐰𝐢𝐭𝐡 𝐚𝐧 𝐍𝐑𝐎 𝐀𝐜𝐜𝐨𝐮𝐧𝐭?

Under ordinary circumstance, when a person is making any payment to a non-resident, the AD Banker mandates such person to furnish Form 15CA  and / or Form 15CB for the transaction before releasing any payment to non-residents in their foreign currency account / offshore bank account. This is because the AD Banker is mandated by the RBI to obtain a certain set of documents (which includes Form 15 CA and / or Form 15 CB) 𝐛𝐞𝐟𝐨𝐫𝐞 𝐩𝐫𝐨𝐜𝐞𝐬𝐬𝐢𝐧𝐠 𝐚𝐧𝐲 𝐫𝐞𝐦𝐢𝐭𝐭𝐚𝐧𝐜𝐞𝐬 𝐨𝐮𝐭𝐬𝐢𝐝𝐞 𝐈𝐧𝐝𝐢𝐚.

Now, here’s the tricky part, what happens if you are making a payment to a non-resident who has an NRO account (for example, NRIs or Person of Indian origin)?

Let’s first understand what is an NRO account? NRO accounts are a popular way for NRIs to manage their deposits or income earned in India such as dividends, pension, rent, sale proceeds, etc. in INR.

If you end up making a payment to an NRO account holder, technically, there is no money going outside India. Hence, the AD Banker is not involved and the remittance can happen directly from the payer’s Indian bank account to the NRO account holder like any other day-to-day transaction.

But, does that mean there is no obligation on the payer to file Form 15CA and / or Form 15CB since there is no money going outside India? 𝐓𝐡𝐞 𝐚𝐧𝐬𝐰𝐞𝐫 𝐭𝐨 𝐭𝐡𝐚𝐭 𝐢𝐬 𝐍𝐨.

The obligation on the payer to file Form 15CA and / or Form 15CB stems from Section 195 of the Income-tax Act, 1961 read with Rule 37BB of the Income-tax Rules, 1962. The section requires any person responsible for making a payment to a non-resident / foreign company to file Form 15CA and / or Form 15CB 𝐩𝐫𝐢𝐨𝐫 𝐭𝐨 𝐫𝐞𝐦𝐢𝐭𝐭𝐢𝐧𝐠 𝐭𝐡𝐞 𝐩𝐚𝐲𝐦𝐞𝐧𝐭.

In layman terms, the obligation to file Form 15CA and / or Form 15CB is not associated with remittance of funds outside India but actually associated with making 𝐩𝐚𝐲𝐦𝐞𝐧𝐭𝐬 𝐭𝐨 𝐧𝐨𝐧-𝐫𝐞𝐬𝐢𝐝𝐞𝐧𝐭𝐬, a fact that is often overlooked by most players.

So keep this in mind 𝐛𝐞𝐟𝐨𝐫𝐞 making your next remittance to a NRO account holder, be it for rent or sale proceeds on transfer of property / shares even if your banker does not mandate as the penalty for non-filing / filing inaccurately is ₹ 1 𝐥𝐚𝐤𝐡!!

### Related posts:

- [Startup Valuations](https://treelife.in/finance/startup-valuations/)

- [Why Convertible Debentures are Investor Friendly – Types & Taxability](https://treelife.in/finance/why-convertible-debentures-are-investor-friendly/)

- [Reporting under CARO 2020 vs. CARO 2016](https://treelife.in/finance/reporting-under-caro-2020-vs-caro-2016/)

- [What is Accounts Payable? Definition, Example, Uses](https://treelife.in/finance/what-is-accounts-payable/)

---

This is informational content from Treelife. For advice specific to your situation, contact support@treelife.in