From April 2026, the Income Tax Department is introducing a new system for reporting foreign remittances. Form 145 and Form 146 will replace the earlier Form 15CA and Form 15CB.

This change aims to simplify the process, make it more digital, reduce paperwork, and improve transparency in reporting foreign transactions.

Old System: Form 15CA & 15CB

Under the earlier system:

• Form 15CA was a self-declaration filed by the person making the payment
• Form 15CB was a certificate issued by a Chartered Accountant

These forms ensured that the payer followed Section 195 of the Income-tax Act, 1961, which deals with TDS on payments made to non-residents.

Why Changes Were Needed in Foreign Remittance Rules

Over time, some problems were noticed in the old system:

• Same information had to be entered in multiple forms
• Heavy reliance on manual processes and professionals
• No real-time checks or validation
• Higher compliance burden for businesses
• Limited connection with banking and tax systems

To overcome these issues, a more streamlined and technology-based system has now been introduced.

Introduction of Form 145 & Form 146

Form 145 – Foreign Remittance Form

• Filed by the person making the payment (remitter)
• Includes complete details of the transaction
• Connected with the income tax system for easy checking and validation

Form 146 – CA Certificate

• Issued by a Chartered Accountant
• Confirms taxability, TDS details, and DTAA benefits (if applicable)
• Replaces Form 15CB with more detailed reporting 

Key Features of the New Forms

• Fully online filing process
• Some details are automatically filled from income tax records
• Built-in checks to reduce errors
• Easier tracking of foreign payments
• Better aligned with modern tax and global compliance standards 

Applicability & Scope

Form 145 and Form 146 are used in the following cases:

• When payments are made to non-residents
• When money is sent outside India
• When the transaction is taxable under Indian law

When These Forms Are Not Required

• If the remittance is not taxable
• If it falls under specific exemption categories
• If it is listed under RBI’s exempt remittance list 

When is Form 145 Required?

Form 145 must be filed:

• Before sending money outside India
• For taxable payments and some non-taxable transactions
• In all cases where reporting is required under income tax rules 

When is Form 146 (CA Certificate) Required?

Form 146 is needed in the following situations:

• When taxability of the payment needs to be determined
• When DTAA benefits are being claimed
• For high-value or complex transactions
• When a professional certification from a Chartered Accountant is required

Simple Steps to File Form 145

1. Log in to the Income Tax e-Filing portal
2. Go to e-File → Foreign Remittance Compliance
3. Select Form 145
4. Enter details like payer, payee, nature, and amount of payment
5. Upload Form 146 if required
6. Check all details using system validation
7. Submit the form using DSC or EVC
8. Download the acknowledgement for your records 

Documents & Details Required

• PAN of the person making the payment
• Details of the foreign recipient
• Nature and purpose of the remittance
• Copy of invoice or agreement
• Tax Residency Certificate (TRC), if applicable
• DTAA calculation (if benefit is claimed)
• TDS calculation details

These details help ensure correct reporting and smooth processing of foreign payments.

Key Compliance Points to Remember

• Correctly identify the nature of the remittance
• Deduct TDS properly as per Section 195
• Keep all supporting documents ready for verification
• Match remittance details with your books of accounts
• Ensure CA certification reflects the actual transaction 

Impact on Businesses & Professionals

For Businesses:

• Simpler compliance process
• Faster remittance processing
• Reduced chances of rejection

For Chartered Accountants:

• Higher responsibility in certification
• Need for more detailed analysis
• Greater reliance on professional judgment 

14. Penalties & Consequences of Non-Compliance

Failure to comply may result in:

• Penalties under the Income Tax Act
• Disallowance of expenses under Section 40(a)(i)
• Delay or rejection of payments by banks
• Notices or scrutiny from the tax department 

Practical Examples

Case 1: Payment for Technical Services (USA)

• Taxable in India
• TDS must be deducted
• Both Form 145 and Form 146 are required

Case 2: Import of Goods

• Usually not taxable
• Form 145 may be required for reporting
• Form 146 is generally not needed

Case 3: Royalty Payment with DTAA Benefit

• Lower tax rate is claimed under DTAA
• Form 146 is required for certification 

Conclusion

The introduction of Form 145 and Form 146 brings a more clear and efficient system for handling foreign remittances in India. It improves transparency and simplifies the reporting process.

To adapt to this system, businesses should:

• Keep all required documents ready
• Ensure correct tax calculation on remittances
• Work closely with professionals for proper compliance

Following these steps will help in smooth and hassle-free foreign transactions.

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