Understanding Form 145/146 under the Income Tax Act, 2025 for Foreign Remittances

With the implementation of the Income Tax Act, 2025, several income tax forms have been renumbered. One such important change is the replacement of Form 15CA with Form 145.

If your business makes payments to a non-resident, understanding Form 145 is essential to ensure smooth foreign remittances and avoid delays with your bank.

What is Form 145?

Form 145 is a declaration that must be filed before remitting money outside India. It provides the Income Tax Department with details of the foreign payment, including:

Name and details of the remitter and recipient
Nature and purpose of the remittance
Amount being remitted
Taxability of the payment in India
Details of tax deducted at source (if applicable)

In simple terms, Form 145 helps the government verify whether the correct tax has been deducted before money is sent abroad. It replaces the earlier Form 15CA under the new Income Tax framework.

Who Needs to File Form 145?

Any person making a payment to a non-resident may be required to file Form 145 before the remittance is processed by the authorised dealer (bank).

Common examples include:

Consultancy fees
Technical service fees
Royalty payments
Software licence fees
Commission payments
Interest payments
Professional service fees
Other taxable foreign remittances

Different Parts of Form 145

Similar to the earlier Form 15CA, Form 145 contains four parts.

Part A

Applicable where:

The remittance is taxable in India; and
The aggregate remittance during the tax year does not exceed ₹5 lakh.

Part B

Applicable where:

The remittance exceeds ₹5 lakh; and
The payer has obtained a certificate from the Assessing Officer under the applicable provisions.

Part C

Applicable where:

The remittance exceeds ₹5 lakh;
The payment is taxable in India; and
A Chartered Accountant has issued Form 146 (earlier Form 15CB).

Part D

Applicable where:

The remittance is not chargeable to tax in India (except specified exclusions under the Rules).

Form 146 – The New Form 15CB

Under the Income Tax Act, 2025:

Form 15CB → Form 146
Form 15CA → Form 145

Where a CA certificate is required, the Chartered Accountant first uploads Form 146, after which the remitter can file Part C of Form 145.

Documents Required

Before filing Form 145, keep the following ready:

PAN of the remitter
Details of the foreign recipient
Invoice or agreement
Purpose of remittance
Amount in foreign currency and INR
Tax Residency Certificate (TRC), wherever applicable
Form 10F, if required
Form 146 (where applicable)
Lower/Nil deduction certificate, if obtained

How to File Form 145?

The filing process is completely online through the Income Tax e-Filing portal.

Steps:

Log in to the Income Tax e-Filing portal.
Go to e-File → Income Tax Forms.
Select Forms as per Income Tax Act, 2025.
Search and select Form 145.
Choose the applicable part (A, B, C or D).
Enter remittance details.
Verify using DSC or Electronic Verification Code (EVC).
Submit the form before the foreign remittance is made.

Key Change Under the New Law

One welcome change under the new framework is that where Part B is filed based on an Assessing Officer's certificate, filing Part C is no longer required, eliminating duplication that existed under the earlier process.

Common Mistakes to Avoid

Selecting the wrong part of Form 145.
Incorrect nature or purpose of remittance.
Filing after the remittance has already been made.
Ignoring DTAA benefits.
Not obtaining Form 146 where required.
Incorrect TDS calculation.
Mismatch between invoice, Form 145 and bank documents.

Conclusion

Although the form number has changed from 15CA to 145, the objective remains the same—to ensure proper reporting of foreign remittances and compliance with tax deduction requirements.

Before making any overseas payment, businesses should carefully determine whether the payment is taxable in India, whether Form 146 is required, and which part of Form 145 is applicable. Proper compliance not only avoids notices from the Income Tax Department but also ensures that banks process foreign remittances without unnecessary delays.

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