New Delhi, April 30, 2026:
In a significant compliance overhaul under the Income Tax Act, 2025, the government has introduced new reporting requirements for foreign remittances, mandating taxpayers to use Form 145 and Form 146 before sending money abroad. The move replaces the long-standing Forms 15CA and 15CB, marking a major shift in how overseas transactions are monitored and taxed.
New Framework for Foreign Remittances
The Income Tax Department has rolled out Form 145 (declaration) and Form 146 (Chartered Accountant certificate)as part of updated Income Tax Rules, 2026. These forms are now mandatory prior to remitting funds outside India, and banks may refuse to process transactions without them.
The reform is aimed at strengthening tax compliance, improving transparency, and ensuring proper reporting of payments made to non-residents and foreign entities.
What is Form 145?
Form 145 is a self-declaration filed by the remitter—the individual or entity sending money abroad. It captures key details such as:
- Purpose of remittance
- Nature of payment
- Taxability and applicable TDS
It must be submitted before every foreign remittance, making it an event-based compliance requirement.
Officials say the form standardises reporting by introducing predefined categories of remittance, reducing errors and ambiguity in disclosures.
What is Form 146?
Form 146 is a certificate issued by a Chartered Accountant, required in cases where:
- The remittance is taxable, and
- The amount exceeds ₹5 lakh in a financial year
The CA certifies taxability, TDS applicability, and compliance with international tax treaties (DTAA).
This certificate is then linked to Form 145 (Part C) and must be submitted before the transaction is executed.
Key Changes from Previous System
- Form 145 replaces Form 15CA, and Form 146 replaces Form 15CB
- Enhanced reporting with structured data fields and predefined categories
- Integration with digital tax systems for better tracking
- Introduction of mandatory CA certification in high-value taxable remittances
Experts note that while the underlying requirement—reporting foreign remittances—remains unchanged, the format and depth of compliance have been significantly upgraded.
Compliance Impact on Individuals and Businesses
The new rules apply broadly to:
- Individuals sending money abroad for services, investments, or education
- Businesses paying foreign vendors, consultants, or licensors
- Companies making royalty, dividend, or interest payments overseas
Failure to comply can lead to penalties of up to ₹1 lakh, and banks may block transactions without proper documentation.
Government’s Objective
The introduction of Forms 145 and 146 aligns with the government’s broader push to:
- Plug tax leakages in cross-border transactions
- Improve data accuracy and audit trails
- Strengthen oversight of outward remittances
Conclusion
With foreign remittances becoming increasingly common—from education payments to global investments—the new forms mark a tightening of regulatory oversight. Taxpayers are advised to familiarise themselves with the updated requirements to avoid delays, penalties, and compliance issues while sending money abroad.
As the new tax regime takes effect, Form 145 and 146 are set to become central pillars of India’s international tax compliance framework.
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