Payments to Non-Residents in India – Complete Compliance Guide

Payments to non-residents are one of the most scrutinised areas under Indian tax law. Incorrect handling of Form 15CA, Form 15CB, DTAA benefits, or Section 195 TDS can result in interest, penalties, and disallowances.

This article explains the complete compliance framework for non-resident payments, illustrated through a consulting services transaction with a Singapore resident.

Nature of Transaction – Consulting Services

An Indian company made payment to a non-resident individual based in Singapore for consulting and management services.

Transaction summary:

• Nature of payment: Consulting services
• Country of recipient: Singapore
• Gross amount: ₹2,01,200
• DTAA rate applied: 10%
• TDS deducted: ₹20,120
• Applicable section: Section 195

Taxability Under Income-tax Act vs DTAA

Tax under Income-tax Act (without DTAA)

• Applicable section: Section 195
• Tax rate: 20%
• Tax liability: ₹40,240

Tax under India–Singapore DTAA

• Relevant article: Article 12
• Tax rate: 10%
• Tax liability: ₹20,120

As per Section 90, the taxpayer can apply the lower of the Act rate or DTAA rate.

TRC and Form 10F

To claim DTAA benefit, the following are mandatory:

• Tax Residency Certificate (TRC) from the non-resident
• Form 10F filed online

DTAA benefit may not be sustained during scrutiny without TRC.

Form 15CB – Chartered Accountant Certificate

Form 15CB certifies:

• Nature of remittance
• Taxability under the Act and DTAA
• Correct TDS computation

Key points:

• Form 15CB can be filed after payment
• Portal may restrict remittance date selection
• TDS deduction date and challan are critical

Form 15CA – Online Compliance Requirement

Since the remittance is taxable and exceeds ₹5 lakh:

Form 15CA (Part C) is applicable.

Ensure consistency between Form 15CA and 15CB in:

• Amount
• DTAA rate
• TRC status
• TDS details

Form 15CA filing is mandatory even if payment is already made.

Section 195 TDS Compliance

• TDS deducted on: 12-Dec-2025
• Challan used: 281
• Return filing: Form 27Q

Accurate reporting in Form 27Q is essential to avoid notices.

GST on Import of Services (RCM)

Consulting services received from a non-resident are taxable under GST:

• Paid under Reverse Charge Mechanism
• Reported in GSTR-3B (Table 3.1(d))
• Input tax credit available, if eligible

Income-tax and GST compliances are independent and both must be followed.

Signing of Form 15CA

The same director receiving payment can sign Form 15CA as an authorised signatory, provided:

• DSC is registered
• Signing is in official capacity

This is legally valid.

Compliance Checklist

• TRC obtained
• Form 10F filed
• Form 15CB filed
• Form 15CA filed
• TDS deducted and paid
• GST under RCM paid
• Form 27Q filed

Key Takeaway

Non-resident payments involve compliance under multiple laws including Income-tax, DTAA, FEMA, and GST. A structured approach helps in reducing tax liability, avoiding penalties, and ensuring smooth assessments.

About HSJ and Associates

HSJ and Associates is a Chartered Accountant firm based in Udaipur, specialising in international taxation, DTAA advisory, non-resident TDS compliance, Form 15CA/15CB certification, and GST on cross-border transactions.