Form 15CA/15CB: Credit Card Payment for Foreign Subscription

Applicability of Form 15CA / 15CB  on Credit Card Payments for Foreign Subscriptions

Rule 37BB Chart Applicability of Form 15CA / 15CB along with explanation relevant to credit card payments for foreign subscriptions like LinkedIn, Zoom, or other SaaS platforms.  

An Indian company makes payment for a LinkedIn Premium Subscription or similar foreign online service using a corporate credit card. As per Section 9(1)(vi) of the Income Tax Act, 1961, payments for access to or use of a website, database, or online service are treated as Royalty. Therefore, such payments are taxable in India when made to a non-resident service provider (e.g., LinkedIn Ireland). TDS U/s  195 applies at 20% + surcharge + cess (grossed up if borne by the payer). Applicable DTAA provisions may reduce the rate (e.g., 10% under the India–Ireland DTAA if Tax Residency Certificate (TRC) is obtained). Credit Card Payments for Foreign Subscriptions Compliance Requirements:

• Even if payment is made via credit card, it still qualifies as a foreign remittance.
• Form 15CB (CA Certificate) and Form 15CA (Remitter Declaration) are mandatory before making such payment.
• Many banks may not request these forms, but the Income Tax Act mandates them for reporting foreign remittances.

Taxability under Income Tax Act

Legal Provision	Implication
Section 9(1)(vi)	Payment for use or right to use software, website, or online database is treated as Royalty.
Section 195	Any sum payable to a non-resident that is chargeable to tax in India requires TDS deduction at source before making the payment.

Thus, foreign subscription payments are taxable in India as “Royalty”, and TDS u/s 195 applies.

Applicable TDS Rate

Particulars	TDS Rate
Domestic Law (without DTAA relief)	20% (u/s 115A) + Surcharge + Health & Education Cess
If DTAA applicable	Lower rate as per DTAA, subject to submission of: – Tax Residency Certificate (TRC) – Form 10F – No PE declaration from the foreign entity

Example: Under India–USA DTAA, royalty may be taxable at 10%, if documentation is in place.

Scenario Recap: Credit Card Payments for Foreign Subscriptions

Particulars	Details
Nature of Payment	Subscription to LinkedIn Premium, Zoom, ChatGPT, or similar digital services (foreign website/database access).
Recipient	Non-resident company (foreign entity).
Character of Income	Considered Royalty U/s  9(1)(vi) of the Income Tax Act, 1961.
Taxability	Taxable in India; TDS applicable U/s  195. If no lower DTAA rate applies : 20% + applicable surcharge + cess.
Mode of Payment	Corporate credit card (still treated as foreign remittance).
Compliance Requirement	Form 15CA and 15CB required (even if bank does not insist).

Foreign Subscription Payments via Credit Card – Compliance Summary

In Case Individuals (Personal Use)

Aspect	Details
Applicable Rule	Rule 37BB of the Income Tax Rules, 1962
Exemption	Individuals making remittances that do not require prior RBI approval under FEMA are exempt from filing Form 15CA / 15CB.
Reason	Covered under the Liberalised Remittance Scheme (LRS) of RBI. Online payments for personal subscriptions (LinkedIn, Zoom, ChatGPT, etc.) are processed through international credit cards within the annual LRS limit (USD 250,000).
RBI Purpose Codes	Exempt codes include: • S0301 – Business Travel • S0305 – Education • S1301 – Family Maintenance • S1107 – Subscription to Online Services (if personal use, under LRS)
TDS Applicability	Not applicable for individuals paying for personal use, as the payment is not in the course of business/profession.
Form 15CA / 15CB Requirement	Not Required, provided: • Payment is by an individual (not firm/company) • The transaction does not require RBI approval • It falls within LRS limits
Bank Processing	Banks / card networks process these as normal LRS transactions without requiring 15CA/15CB.

Individual: No Form 15CA / 15CB required for personal foreign subscription payments made via credit card by individuals under LRS.

For Non-Individuals (Companies, Firms, LLPs, Trusts, HUFs)

Aspect	Details
Applicable Rule	Rule 37BB (read with Section 195 of the Income Tax Act)
Nature of Payment	Subscription to foreign websites or SaaS platforms = Royalty / Fees for Technical Services (FTS) U/s  9(1)(vi) or 9(1)(vii).
Taxability	Taxable in India; TDS u/s 195 applies.
TDS Rate	20% + surcharge + cess (as per Section 115A) or lower DTAA rate (if TRC + Form 10F provided).
Form 15CA / 15CB Applicability	Mandatory, since payment is chargeable to tax and not exempt under Rule 37BB.
Compliance Thresholds	• If ≤ ₹5 lakh in FY → Form 15CA (Part A) only • If > ₹5 lakh in FY → Form 15CA (Part C) + Form 15CB (CA certificate)
Payment Mode	Even if made via corporate credit card, still a foreign remittance under FEMA → compliance applies.
Penalty for Non-filing	₹1,00,000 per default U/s  271-I.

 Non-Individual: For businesses or entities, payments for foreign digital subscriptions are taxable as royalty, hence TDS u/s 195 and Form 15CA/15CB filing are mandatory, even for credit card payments.

Rule 37BB – Applicability of Form 15CA / 15CB

Rule 37BB of the Income-tax Rules, 1962, governs reporting of payments made to non-residents (other than salaries) and prescribes the forms to be filed based on nature and amount of remittance.

When Form 15CA/15CB is required—Rule 37BB :Applicability of Form 15CA & 15CB

Nature of Remittance	Form 15CA / 15CB Requirement
In case Remittance taxable in India and amount > INR 5 lakh during the FY	Form 15CA (Part C) + Form 15CB (CA certificate)
Remittance taxable in India and amount ≤ INR 5 lakh during the FY	Form 15CA (Part A) only and No CA certificate required
in case Remittance not taxable in India (under DTAA or otherwise)	Form 15CA (Part D) (no Form 15CB required)
Remittance covered under Rule 37BB (33 specified items) such as import of goods, travel, education, etc.	Neither Form 15CA nor 15CB required(Based on AO certificate )

When Form 15CA / 15CB are NOT Required

Under Rule 37BB(3), reporting is not required for 33 specific categories of remittances (Schedule to Rule 37BB).Examples :Imports of goods, Travel and visa fees, Education and medical expenses abroad, Loan repayments to non-resident banks, Indian embassy payments, Postal remittances  Foreign subscription payments (LinkedIn, Zoom, etc.) are not exempted, hence Form 15CA & 15CB apply.

Compliance Summary for Credit Card Payments (Foreign Subscriptions)

Step	Action Required
1️⃣	Obtain invoice/email receipt showing the nature of payment, foreign beneficiary name, and amount.
2️⃣	Determine taxability : most SaaS/digital subscriptions are royalty under Sec. 9(1)(vi).
3️⃣	Deduct TDS u/s 195 at applicable rate (generally 20% + surcharge + cess, or DTAA rate if TRC + Form 10F available).
4️⃣	Get Form 15CB from a Chartered Accountant (confirming TDS deduction and taxability).
5️⃣	File Form 15CA (Part C) on the Income Tax Portal before/after payment.
6️⃣	Maintain records for audit : invoice, Form 15CA acknowledgment, Form 15CB, and payment proof (credit card statement).

Examples of Common Cases Requiring 15CA/15CB:

Type of Payment	Taxability	15CA/15CB Required
LinkedIn / Zoom / Microsoft / Google subscriptions	Royalty / FTS	Yes
Payment for foreign consulting / technical services	FTS	Yes
Import of goods (purchase of tangible items)	Not taxable	No
Advertisement on foreign platforms (e.g., Meta, Google Ads)	Royalty / FTS	Yes
Training or conference fee to foreign entity	FTS	Yes
Payment for travel or education abroad (individual)	Not taxable	No

Even for credit card transactions, compliance under Rule 37BB is applicable.

Foreign subscription payments, even when made via credit card, are considered taxable “royalty” U/s  9(1)(vi) and are subject to TDS u/s 195. Reporting through Form 15CA & Form 15CB is mandatory as per Rule 37BB, regardless of whether the bank insists.

Remitter Type	Purpose	RBI Approval Needed?	TDS u/s 195	Form 15CA/15CB	Remarks

 

Individual

Personal subscription (LinkedIn, Netflix, etc.)

No

No

Not Required

Falls under LRS exemption

 

Individual

Business/professional expense

No

Yes

Required

Treated as business remittance

 

Company / Firm / LLP / HUF / Trust

Any subscription

No

Yes

Required

Considered taxable “royalty

Final Takeaway- Form 15CA/15CB: Credit Card Payment for Foreign Subscription

• Individuals: Exempt from Form 15CA/15CB for personal foreign subscription payments (within LRS, no RBI approval needed).
• Businesses / Firms / Companies: Treated as taxable foreign remittance (royalty) :  TDS u/s 195 + Form 15CA/15CB mandatory.
• Credit Card Payments: Mode of payment does not alter the taxability or reporting requirement under the law.
• Always obtain Form 15CB and file Form 15CA for payments toward foreign online subscriptions or digital services.  Retain supporting documents  invoice, TRC (if available), and payment proof  for record and audit trail., Even though payment is made via credit card, it is treated as foreign remittance because the ultimate beneficiary is outside India.
• Non-compliance may attract penalties U/s  271-I (INR 1,00,000 per default). The CA certificate (Form 15CB) validates that correct tax has been withheld and reported.