The income tax department has introduced Form 145 and Form 146 for reporting foreign remittances, replacing the earlier Forms 15CA and 15CB. According to reports from Upstox, these forms must be furnished before making a payment to a non-resident or foreign entity, and banks may require them before processing international transfers. The basic requirement remains the same - foreign remittances must be reported and tax compliance ensured before the money leaves the country, but the reporting format has now been revised under updated rules.
Form 145 is a declaration to be filed by the person making the payment and includes critical details such as the nature of remittance, amount being sent abroad, and applicable tax deduction details. As reported by Upstox, it is required before the transaction is processed and covers all necessary disclosures for foreign remittance reporting. This form serves as the primary declaration for individuals or entities making international payments. Form 145 is filed for each remittance made by a person responsible for such remittance, before remitting the amount, and can be submitted through the e-Filing portal or offline utility. The form is available to any category of taxpayer, Authorized Signatory and Representative Assessee to furnish information regarding payments to non-residents or foreign companies.
Form 146 is a certificate issued by a Chartered Accountant in specified cases and confirms whether the remittance is taxable, the applicable tax provisions, and the correct rate of tax deduction. According to Upstox, it is generally required for transactions where professional certification is needed for compliance, such as when the nature of the payment requires CA certification. In some cases, only Form 145 may be sufficient where the transaction is not taxable or the payment nature does not require CA certification. Form 146 is a certificate in form 146 from an accountant as defined in the Section 515(3)(b) of the Act, and is required for Part C cases where remittances exceed ₹ 5,00,000 during the tax year.
Form 145 has four distinct parts based on remittance taxability and amount thresholds. Part A covers taxable remittances up to ₹ 5,00,000 during the tax year, Part B covers taxable remittances exceeding ₹ 5,00,000 with AO certificate under section 395(1)/395(2), Part C covers taxable remittances exceeding ₹ 5,00,000 with CA certificate in Form 146, and Part D covers non-taxable remittances. The form requires particulars of remitter, remittee and remittance details, along with taxability details under IT Act provisions and Double Taxation Avoidance Agreement (DTAA). Particulars of remitter and remittee, details of accountant, remittance details, taxability under the Act, taxability under DTAA, details of tax deducted at source and declaration are prefilled based on ARN details of filed Form 146. A Certificate from Chartered Accountant in form 146 is required for uploading the Form 145 online in certain cases, as specified in the e-Filing portal guidelines.
You will likely need to comply if you are sending money abroad to a non-resident or foreign company, or making taxable remittances such as fees, services, or payments linked to income. As reported by Upstox, banks and authorised dealers typically ask for these forms before approving the transfer. The compliance requirement applies to all foreign remittances regardless of the recipient's status, ensuring proper tax documentation and verification before international transfers are processed. Any category of taxpayer, Authorized Signatory and Representative Assessee can use Form 145 to ensure proper tax compliance for international payments.
Foreign remittances are closely monitored for tax compliance, and incorrect or missing documentation can delay transfers or lead to additional verification at the bank level. According to Upstox, with the introduction of Forms 145 and 146, the reporting process is now more structured, and taxpayers need to ensure the correct form is filed before initiating the transfer. The new framework provides a more organized approach to foreign remittance reporting, ensuring better compliance and reduced processing delays for international transactions. After successful e-Verification, a success message is displayed along with a Transaction ID and Acknowledgement Number, with confirmation messages sent to registered email and mobile numbers for future reference.
