Form 145 and Form 146 for Foreign Remittances: A Complete Guide for Businesses
What Are Form 145 and Form 146?
Under Rule 220 of the Income-tax Rules, 2026, specified information must be submitted before making eligible remittances to a non-resident (other than a company) or a foreign company, subject to the rule’s scope and the exemptions listed under Rule 220(3). This information is submitted through Form 145, a digital self-declaration that records details of the remitter, recipient, authorised dealer bank, payment type and TDS deducted. It replaces Form 15CA and serves as the primary disclosure document used by the Income Tax Department to determine whether the payment is taxable in the hands of the foreign recipient. Form 145 is filed separately before every qualifying remittance rather than through an annual or combined filing.
The responsibility to deduct tax arises under Section 393 of the Income-tax Act, 2025, which corresponds to the earlier withholding provisions under Section 195 of the 1961 Act. Under this provision, any payment made to a non-resident that is taxable in India must be subject to TDS at the applicable rate. To confirm that the correct rate has been applied under the Act and the relevant Double Taxation Avoidance Agreement (DTAA), a practising Chartered Accountant issues Form 146. This accountant’s certificate replaces Form 15CB and must include a valid UDIN. It is issued by an “accountant” as defined under Section 515(3)(b) of the new Act.
The process generally begins when the taxpayer assigns Form 146 to the CA through the e-filing portal. The CA then submits the form using a registered Digital Signature Certificate (DSC). Once filed, the acknowledgement number is used by the remitter to complete Part C of Form 145.
What Are the Main Compliance Changes in Form 145?
One of the major changes is the introduction of structured payment descriptions instead of open-ended remittance details. Form 145 requires remitters to select the payment category from a predefined drop-down list aligned with the RBI Purpose Code framework. Businesses should verify the exact number of categories and their mapping through the current filing utility before incorporating them into their standard operating procedures.
This change aims to make payment classification more consistent and reduce the possibility of incorrectly reporting payments. For example, a payment for “Fees for Technical Services” should not be classified as ordinary business income. Incorrect categorisation may lead to filing complications and tax-related risks at both the income tax portal and banking levels.
Form 145 also requires more organised details about the foreign vendor (the recipient) and the authorised dealer bank processing the transaction. These details may be cross-checked against other related disclosure forms, including Form 147 submitted by Authorised Dealers. However, businesses should confirm the complete list of required fields through the live e-filing portal or offline utility before updating their vendor records, as the department may revise the form’s data requirements over time.
When Is a CA Certificate (Form 146) Required?
A Chartered Accountant’s certificate is not compulsory for every international payment. Its requirement depends on whether the remittance is taxable in India and the total amount paid to the recipient during the relevant tax year.
Generally, Form 146 is required when the payment is taxable, the total remittances to that recipient exceed ₹5 lakh during the tax year, and the remitter has not obtained a certificate from the Assessing Officer. Form 145 is divided into four parts to cover these different situations:
Part A of Form 145 – ₹5 Lakh Limit
This part is used when the remittance is taxable in India but the total amount paid to the recipient does not exceed ₹5 lakh during the tax year. A Form 146 certificate is not required.
Part B of Form 145 – Assessing Officer Certificate
This part applies when the taxable remittance exceeds ₹5 lakh and the remitter has obtained a lower or nil TDS deduction certificate from the Assessing Officer. In this situation, the Assessing Officer’s certificate is submitted instead of Form 146.
Part C of Form 145 – CA Certificate Required
This part is applicable when the remittance exceeds ₹5 lakh and the remitter does not have a certificate from the Assessing Officer. Before submitting Part C, the remitter must obtain Form 146, the CA certificate containing a valid UDIN.
Part D of Form 145 – Non-Taxable Remittances
This part is used when the remittance is not taxable under the Income-tax Act. Form 146 is not required for these transactions.
TDS and CA Certification Matrix
Before making an international payment, the accounts payable team can refer to the table below to identify the applicable part of Form 145 and determine whether a CA certificate is required.
| No. | Situation / Type of Remittance | TDS Deduction Required? | Form 146 (CA Certificate) Required? | Applicable Part of Form 145 |
|---|---|---|---|---|
| 1 | Payment is not taxable in India | No | No | Part D |
| 2 | Taxable remittance with an aggregate amount of ₹5 lakh or less | Yes | No | Part A |
| 3 | Taxable remittance exceeding ₹5 lakh, with an AO certificate under Section 395 | Yes (at a lower or nil rate) | No | Part B |
| 4 | Taxable remittance exceeding ₹5 lakh, without an AO certificate | Yes | Yes | Part C |
| 5 | Remittance covered under the exemptions listed in Rule 220(3) | – | No | Form 145 is not required |
Note: If tax relief is claimed under a Double Taxation Avoidance Agreement (DTAA), eligibility must be verified and supported with documents such as a Tax Residency Certificate (TRC) and Form 41, along with the Act-based tax rate assessment included in Form 146.
Conclusion
The replacement of Forms 15CA and 15CB with Forms 145 and 146 represents a significant procedural update to the foreign remittance reporting system. Structured payment classifications, CA certificates linked to UDINs and increased system-based verification place greater emphasis on accuracy in cross-border transactions.
Finance teams should review their vendor and remittance records, collect Tax Identification Number (TIN) and country-of-residence details wherever available, and ensure that their internal service classifications follow the RBI Purpose Code framework before the new requirements take effect on 1 April 2026.
