What is the penalty for not filing Form 15CA before a foreign remittance?

Last updated 3 August 2026

Full Answer

A textile trading company in Surat made nine foreign payments across a financial year to a manufacturer in Bangladesh. All nine payments were for legitimate import purchases. TDS was correctly assessed as not applicable under the relevant DTAA. The payments cleared through their SBI account without issue. No 15CA was filed for any of the nine transactions.

Eighteen months later, a notice arrived under Section 271-I. The Assessing Officer had cross-referenced the bank's foreign remittance reporting with the Income Tax portal and found nine unmatched outward remittances. The potential penalty exposure was Rs 9 lakhs.

Section 271-I was introduced by the Finance Act, 2015 specifically to enforce Form 15CA (now Form 145) compliance. The provision is straightforward: if a person who is required to furnish Form 15CA fails to do so, the Assessing Officer may direct that person to pay a penalty of Rs 1,00,000. The word 'may' gives the AO discretion, but the law does not cap the number of penalties per year or provide an automatic waiver for first-time omissions.

The penalty is separate from TDS liability. Correctly assessing TDS and even correctly paying it does not protect you from the 15CA filing penalty. The filing obligation under Section 195(6) is independent of whether any tax was due. You can have zero TDS liability and still owe Rs 1 lakh for each missed 15CA (Form 145) filing.

Banks are now the practical enforcement gateway. Category I Authorised Dealer banks operating under FEMA are required by RBI guidelines to collect 15CA documentation before processing eligible remittances. Most major banks, including HDFC, ICICI, Axis, and SBI, will not process a foreign payment above the exempt threshold without the 15CA acknowledgement number. However, some payments still slip through cooperative banks, forex dealers, or informal channels, and those situations carry the highest penalty exposure.

The scrutiny pathway has become more systematic. Under the Annual Information Statement framework introduced by the Income Tax department, banks report all outward foreign remittances above threshold amounts. The department's data reconciliation system matches these reports against Form 15CA filings by PAN. Gaps are flagged automatically for potential scrutiny. This is not a manual review process anymore.

There is a second layer of risk beyond the 271-I penalty. When a payment emerges without 15CA in a scrutiny proceeding, the Assessing Officer often examines the nature of the payment independently. If the AO determines that TDS should have been deducted and was not, you face a demand under Section 201 for the TDS amount plus interest under Section 201(1A) at 1.5 percent per month from the date the tax was deductible. This can significantly exceed the Rs 1 lakh penalty by itself.

There is also a FEMA dimension. Large unaccounted outward remittances can trigger an RBI inquiry under FEMA's Capital Account Transaction provisions, separate from the Income Tax proceedings entirely.

If you have historical payments where 15CA was not filed, the most sensible approach is voluntary disclosure before the department identifies them. A CA can assess the exposure and advise whether compounding under FEMA or disclosure in a revised return is appropriate for your specific situation. Proactive disclosure is consistently treated more favourably than compliance that surfaces only under scrutiny.

The filing itself is free and takes fifteen to twenty minutes on the Income Tax e-filing portal. For a payment of even Rs 5 lakhs, the Rs 1 lakh penalty represents a 20 percent compliance cost. No business rationale justifies skipping it.

This article is for general information only. For your specific remittance, consult a practicing CA.