Form 145 and Form 146: Foreign Remittance Compliance Under Income Tax Act 2025

What is Form 145 and when is it required for foreign remittances? Form 145 is a declaration filed by a person making a payment abroad, confirming that applicable Indian taxes have been paid or the remittance is exempt from tax. It is mandatory for taxable foreign remittances before the bank processes the transfer. Exempt payments use Part A; taxable payments above ₹5 lakh require a CA-certified Form 146 alongside.

From April 1, 2026, any person remitting money outside India must comply with the updated foreign remittance declaration framework under the Income Tax Act 2025. The forms have new numbers but the underlying compliance logic remains: the remitter must determine taxability, choose the correct form part, obtain a CA certificate where the payment threshold requires it, and file on the income tax portal before the bank initiates the transfer. Banks will not process the remittance without the Form 145 acknowledgement for taxable payments.

What Is Form 145? (Replaces Form 15CA)

Form 145 is the successor to Form 15CA under the Income Tax Act 2025. The purpose is identical: it is a declaration by the remitter (the person or entity making the overseas payment) that either the remittance is not chargeable to tax in India, or that the applicable tax has been deducted at source.

Every person making a remittance to a non-resident or foreign company must file Form 145 where the payment is chargeable to tax under the Income Tax Act or any Double Taxation Avoidance Agreement (DTAA) between India and the recipient's country of residence. The obligation falls on the remitter, not the recipient.

The Central Board of Direct Taxes (CBDT) prescribes the form and the filing procedure. Banks are required to obtain the Form 145 acknowledgement number before processing the SWIFT transfer. Authorised dealers and banks that process remittances without the acknowledgement number for taxable payments are independently liable under the Foreign Exchange Management Act.

The key structural change from Form 15CA is that Part D, which covers post-remittance filings in exceptional circumstances, is now explicitly tied to Reserve Bank of India (RBI)-approved delays and requires documentary evidence of the RBI concurrence.

What Is Form 146? (Replaces Form 15CB)

Form 146 replaces Form 15CB. It is a certificate issued by a Chartered Accountant after examining the nature of the payment, the applicable provisions of the Income Tax Act 2025 or the relevant DTAA, and the TDS deductibility.

A CA issuing Form 146 certifies:

• The nature of the remittance and the relevant head of income under Indian tax law
• Whether the payment is taxable in India under domestic law or treaty provisions
• The applicable rate of TDS and the amount of tax deductible
• Whether any exemption or lower deduction certificate under Section 197 of the Income Tax Act applies
• That the tax liability has been discharged before the remittance is made

The CA must generate a Unique Document Identification Number (UDIN) from the Institute of Chartered Accountants of India (ICAI) portal for every Form 146 issued. A Form 146 without a valid UDIN is not accepted on the income tax e-filing portal.

Form 145 Parts A, B, C, D: When Each Applies

Part A

Part A applies when the remittance is not taxable in India. This covers three scenarios: the payment is exempt under the Income Tax Act 2025 itself, it is exempt under a DTAA (for example, business income of a foreign entity with no permanent establishment in India), or the aggregate remittances to the same recipient during the financial year are below ₹5 lakh.

No CA certificate or Form 146 is required for Part A. The remitter self-declares the non-taxability.

Part B

Part B applies when the remittance is taxable but the aggregate amount sent to the same recipient during the financial year does not exceed ₹5 lakh. Again, no Form 146 is required. This is the provision for smaller taxable payments where the compliance burden is proportionate.

Part C

Part C is the high-scrutiny category. It applies when the remittance is taxable and the aggregate remittances to the recipient exceed ₹5 lakh in a financial year. Before filing Part C, the remitter must obtain Form 146 from a CA. The CA certificate must be uploaded during the Part C filing on the portal. Part C cannot be submitted without a valid Form 146 with UDIN.

Part D

Part D is filed after the remittance has already been made, which is the exception rather than the rule. It applies only in specific cases where RBI has approved a delay in filing. The remitter must provide documentary evidence of the RBI concurrence along with the Part D submission.

For the vast majority of remitters, Part C (with Form 146) or Part A (for exempt payments) will be the relevant options.

The 33 Exempt Transaction Categories Under Rule 37BB

Rule 37BB(3) prescribes 33 categories of remittances that are fully exempt from the Form 145 requirement. For these payments, neither Form 145 nor Form 146 is required. The major categories include:

• Imports of goods into India
• Tuition and other fees paid to recognised foreign universities for education
• Medical treatment abroad by an Indian resident
• Purchase of air, rail, or sea travel tickets for travel outside India
• Remittances by Indian residents to close family members (spouse, children, parents) up to USD 25,000 per financial year
• Payments for subscriptions to foreign publications and magazines
• Embassy and consulate remittances
• Payments by diplomatic missions in India

The critical point in practice: just because a transaction type looks like it might be on the exempt list does not mean the specific payment qualifies. An Indian company paying a foreign entity for a subscription to a foreign magazine is exempt. The same company paying for a SaaS licence to a US technology vendor is not on the exempt list and is typically treated as royalty income taxable in India. When in doubt, treat the payment as potentially taxable and consult a CA before processing.

For detailed guidance on withholding obligations on payments to non-residents, see our TDS on non-residents guide covering Section 195 and Section 393.

Step-by-Step: How to File Form 145 on the E-Filing Portal

1. Log in to incometax.gov.in using your PAN credentials.
2. Navigate to e-File > Income Tax Forms > File Income Tax Forms.
3. Search for Form 145 and select the appropriate assessment year.
4. Choose the correct Part (A, B, C, or D) based on the taxability analysis and aggregate amount.
5. For Part C, upload the CA-generated Form 146 with the UDIN before proceeding.
6. Fill in remittee details: name, country of residence, PAN (if applicable), nature of payment, amount in foreign currency, and the bank through which the remittance is being made.
7. Submit the form and download the acknowledgement with the unique Form 145 number.
8. Provide this acknowledgement number to your bank's forex desk. The bank will enter the number in the SWIFT transaction details before processing.

The entire filing typically takes 20-45 minutes for a straightforward Part A or Part B. Part C filings depend on how quickly the CA can review the transaction and issue Form 146 with UDIN, which usually requires 1-3 business days.

If you need help with the filing process, the Tax Garden support team handles foreign remittance compliance end to end.

Practical Examples: SaaS Vendor Payment, Student Fees, NRI Remittance

Indian company paying a US SaaS vendor

An Indian private limited company pays USD 2,000 per month to a Delaware-based software company for a CRM licence. The payment is royalty income under the Income Tax Act 2025 and is taxable in India. The aggregate annual payment is approximately ₹20 lakh, well above the ₹5 lakh threshold. The company must obtain Form 146 from a CA certifying the applicable TDS rate (typically 10-15% under the India-US DTAA, subject to a valid Tax Residency Certificate from the US vendor) and then file Form 145 Part C each time the payment is made.

Indian student paying a foreign university

An Indian student pays GBP 12,000 in tuition fees to a UK university. Education fees to recognised foreign universities fall under the Rule 37BB(3) exempt categories. No Form 145 or Form 146 is required. The student (or the bank) simply processes the remittance under the Liberalised Remittance Scheme (LRS) without additional income tax compliance.

NRI sending money to parents in India

This is an outward remittance from India's perspective only if an Indian resident is sending money abroad. An NRI sending money from the US to parents in India is an inward remittance and Form 145 does not apply. If an Indian resident is sending money to a non-resident abroad as a family remittance within the USD 25,000 annual limit, that falls under the Rule 37BB(3) exempt category and no Form 145 is needed.

For a full breakdown of compliance costs across these scenarios, see our pricing page.

Penalty for Not Filing Form 145

Section 462 of the Income Tax Act 2025 (the successor to Section 271-I of the Income Tax Act 1961) prescribes a penalty of ₹1 lakh per instance for failure to furnish Form 145 where required.

The penalty is per remittance, not per financial year. A company making twelve monthly SaaS vendor payments without filing Form 145 faces a potential penalty of ₹12 lakh, in addition to interest and penalties for the underlying TDS default under Section 201.

The assessing officer has discretion to levy or waive the Section 462 penalty based on whether there was reasonable cause. However, relying on a reasonable cause defence after the fact is substantially weaker than filing correctly before the remittance.

Banks are required to report remittances for which they did not receive a Form 145 acknowledgement to the income tax department. This makes non-compliance easily detectable during scrutiny.

Frequently Asked Questions

Does Form 145 apply to all foreign remittances or only taxable ones?

Form 145 applies only to remittances that are chargeable to tax in India. Payments falling under the 33 exempt categories in Rule 37BB(3) — such as imports, education fees, and medical treatment abroad — do not require Form 145. For taxable payments, Part A covers non-taxable remittances, Parts B and C cover taxable ones based on the aggregate amount threshold of ₹5 lakh.

How long does it take to get Form 146 from a CA?

A CA typically takes 1-3 business days to review the transaction, verify the applicable DTAA provisions and TDS rate, and issue Form 146 with UDIN. Turnaround depends on how quickly the remitter provides the contract, invoice, and Tax Residency Certificate from the foreign recipient. For recurring payments to the same vendor, the CA can often issue subsequent Form 146 certificates faster once the initial review is done.

What happens if I send money abroad without filing Form 145?

The bank is required to report the remittance to the income tax department. You face a penalty of ₹1 lakh per instance under Section 462 of the Income Tax Act 2025. You also remain liable for TDS that should have been deducted, plus interest under Section 201. The total exposure for a ₹20 lakh annual SaaS payment with 15% TDS, ₹1 lakh penalty, and interest can easily exceed ₹5 lakh.

My company pays a US software vendor monthly. Do I need Form 145 every time?

Yes. For Part C filings (taxable payments exceeding ₹5 lakh in aggregate), Form 145 must be filed before each individual remittance. You also need a fresh Form 146 from your CA for each filing. However, if you have a running contract with the same vendor, your CA can typically review the recurring invoices quickly and issue Form 146 with UDIN for each payment without a full fresh analysis every month.

This article draws on the Income Tax Act 2025, Rule 37BB of the Income Tax Rules as amended effective April 1, 2026, and CBDT circulars on foreign remittance procedures. Tax Garden updates its compliance guidance as CBDT issues revised instructions. Readers should verify the current exempt category list and applicable DTAA rates with a qualified Chartered Accountant before processing cross-border payments.