Form 145 Explained: Form 15CA Replacement

Introduction to Form 145

Form 145 is a declaration form required when sending money to a non-resident person or a foreign company. Earlier, this declaration was filed using Form 15CA under the Income Tax Act, 1961. Under the Income Tax Act, 2025, Form 145 has replaced Form 15CA and will be applicable from 1st April 2026.

What is Form 145?

Form 145 is a compulsory declaration that must be submitted before making certain payments outside India to a non-resident or foreign entity. The purpose of this form is to report foreign remittances and ensure proper tax compliance.

This form is governed by different sections of the Income Tax Act, 2025, along with the applicable income tax rules. It helps authorities track payments made abroad and verify whether taxes are applicable on such transactions.

The table below explains the relevant form number, applicable sections, and rules under both the earlier tax law and the new Income Tax Act, 2025.

Why Was Form 145 Introduced in the New Income Tax Law?

Earlier, people making payments to non-residents or foreign companies had to file Form 15CA under the old income tax law. This form was used to report foreign payments and ensure proper tax compliance before sending money outside India.

With the introduction of the Income Tax Act, 2025, older forms were updated and replaced to match the new tax system. As a result, Form 145 has replaced Form 15CA from 1st April 2026 for reporting foreign remittances.

Understanding the Earlier Form for Foreign Remittances

The earlier declaration form was required before sending money to a non-resident or foreign company. It helped tax authorities track payments made outside India and check whether tax needed to be deducted on such payments.

Under the new tax law, Form 145 now serves the same purpose.

Who Needs to File Form 145?

Form 145 must be filed by anyone making payments to a non-resident or foreign company before transferring money outside India.

This may include:

• Companies making payments such as interest, royalties, professional fees, or dividends to foreign entities
• Individuals sending money abroad for services, investments, or business-related expenses
• Businesses paying overseas consultants, service providers, or licence fees
• Financial institutions processing foreign payments for customers
• Any taxpayer or authorised person responsible for reporting foreign remittances

Important: Form 145 must be filed for every separate payment. One form cannot be used for multiple transactions.

Cases Where Form 145 is Not Required

Form 145 may not be required in certain cases where the payment is not taxable under the Income Tax Act, 2025.

For example:

• Foreign payments made by an individual that are not taxable and do not need prior approval from the central banking authority
• Certain transactions carried out by units operating in special financial zones as allowed under the law
• Payments specifically exempted under the rules and not taxable in India

Parts of Form 145 Explained

Part A – Taxable Payments up to ₹5 Lakh

Part A is used when:

• The payment is taxable, and
• Total payments to the same recipient during the financial year are up to ₹5 lakh

Details required include:

• Information of the person making payment
• Information of the recipient abroad
• Payment amount, country, and bank details
• Type of income/payment
• Tax deduction details
• Purpose of remittance
• Declaration and signature

Part B – Taxable Payments Above ₹5 Lakh with Tax Approval

Part B applies when:

• The payment is taxable,
• Total payments exceed ₹5 lakh, and
• A lower tax deduction approval has been received from the tax officer.

In addition to Part A details, information about the approval order and tax rate must also be provided.

Part C – Taxable Payments Above ₹5 Lakh with Accountant Certificate

Part C is commonly used for business-related foreign payments.

It applies when:

• The payment is taxable,
• Total payment exceeds ₹5 lakh, and
• A certificate from a chartered accountant is obtained instead of tax officer approval.

Extra details required include:

• Accountant details
• Certificate acknowledgement number
• Document identification number
• Taxability details under Indian tax law
• Tax treaty benefit details, if applicable
• Tax residency proof, where required

Part D – Non-Taxable Foreign Payments

Part D is used when the foreign payment is not taxable under Indian tax law.

Examples may include:

• Import of goods
• Certain investment-related transactions
• Other exempt foreign remittances

Basic details of the sender, receiver, payment, and declaration of non-taxability are required.

Documents Required for Filing Form 145

To file Form 145, you may need:

• PAN of the person making payment
• TAN details
• Name, address, and tax identification number of the foreign recipient
• Country of residence of the recipient
• Tax residency proof (if treaty benefits are claimed)
• Payment amount and currency details
• Purpose of remittance
• Nature of income/payment
• Bank branch code
• Tax deduction details
• Approval or accountant certificate, if applicable

Step-by-Step Process to File Form 145 Online

You can file Form 145 through the income tax filing portal or by using the offline utility.

For Part A, Part B, and Part D

1. Log in to the income tax filing portal.
2. Go to tax forms and select forms under the Income Tax Act, 2025.
3. Choose Form 145 and select the relevant tax year.
4. Select the applicable part (A, B, or D).
5. Fill in payment details, recipient details, and tax information.
6. Review the form carefully.
7. Complete electronic verification and submit the form.
8. Save the acknowledgement receipt and provide it before the payment is processed.

For Part C

1. Add your chartered accountant on the tax filing portal.
2. The accountant files the required certificate and verifies it electronically.
3. Select Part C while filing Form 145.
4. Enter the certificate acknowledgement number to auto-fill details.
5. Complete the remaining information, verify, and submit the form.
6. Save the acknowledgement for future reference.

What is Form 146 and How is it Connected to Form 145?

Form 146 is a certificate issued by a Chartered Accountant under the Income Tax Act, 2025. It replaces the earlier Form 15CB and is mainly used for taxable foreign payments above ₹5 lakh.

This certificate helps confirm whether tax needs to be deducted on the payment made to a non-resident or foreign company. It also verifies the tax amount and other important details before the remittance is processed.

Form 146 generally includes:

• Purpose and type of foreign payment
• Whether the payment is taxable under the Income Tax Act, 2025
• Taxability under tax treaty provisions, if applicable
• Applicable TDS rate and tax amount to be deducted
• Tax residency details of the foreign recipient
• Unique identification number for certificate verification

Important: Form 146 is required only for Part C of Form 145, mainly when:

• The payment is taxable,
• The amount exceeds ₹5 lakh, and
• No approval certificate has been obtained from the tax officer.

In simple words, Form 146 supports Form 145 by certifying the tax details of certain foreign remittances.

Penalties for Not Filing Form 145

Filing Form 145 is a legal requirement under the Income Tax Act, 2025. Failure to file the form or providing incorrect details may lead to penalties.

Here are the possible consequences:

• A penalty of up to ₹1 lakh may be charged for not filing Form 145 or submitting incorrect information.
• Foreign payment processing may get delayed or stopped if the required acknowledgement is not available.
• Incorrect tax deduction or failure to deduct tax may lead to additional tax demand, interest, and compliance issues.
• Providing wrong information can attract penalties even if the form has been filed.

To avoid problems, it is important to file Form 145 correctly and ensure all tax details are accurate before making foreign payments.

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