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Foreign Remittances under the Income Tax Act, 2025: Transition from Forms 15CA/15CB to Forms 145/146

Introduction

Foreign remittances made by residents to nonresidents have always been a sensitive area under Indian tax law due to their potential tax implications and the risk of revenue leakage. To ensure effective monitoring and tax compliance on such payments, the Income Tax law has historically mandated the furnishing of detailed information and certifications prior to remittance.‑furnishing of detailed information and certifications prior to remittance.

Under the Income Tax Act, 1961, this objective was achieved through Forms 15CA and 15CB, prescribed under section 195(6) read with Rule 37BB of the Income Tax Rules, 1962. With the enactment of the Income Tax Act, 2025, effective from 1 April 2026, the framework has been continued with certain procedural refinements. The new law introduces Form No. 145 and Form No. 146 as corresponding equivalents while retaining the substantive compliance philosophy.‑‑‑Tax Act, 2025, effective from 1 April 2026, the framework has been continued with certain procedural refinements. The new law introduces Form No. 145 and Form No. 146 as corresponding equivalents while retaining the substantive compliance philosophy.

This article explains the purpose of these forms, their statutory basis under the new Act, transitional issues, and key compliance relaxations.

Purpose of Forms 15CA and 15CB under the Income Tax Act, 1961 Act, 1961

Form 15CA functioned as a self-declaration by the remitter, furnishing information regarding:

  • Nature and purpose of remittance
  • Details of the non‑resident recipient
  • Taxability of the payment
  • Compliance with Tax Deduction at Source (TDS) under section 195

Form 15CB was a certificate issued by a Chartered Accountant, certifying:

  • Nature of remittance
  • Chargeability to tax in India
  • Applicable DTAA provisions, if any
  • Correct rate of TDS or justification for nil/lower deduction

These requirements were statutorily anchored in section 195(6) of the Income Tax Act, 1961, and were essential for enabling banks and authorised dealers to process outward remittances.‑ and were essential for enabling banks and authorised dealers to process outward remittances.

Corresponding Provisions under the Income Tax Act, 2025 Act, 2025

The Income Tax Act, 2025 preserves the foreign remittance compliance framework within section 397(3)(d). The corresponding prescribed forms under the new law are:‑ax Act, 2025 preserves the foreign remittance compliance framework within section 397(3)(d). The corresponding prescribed forms under the new law are:

  • Form No. 145 – equivalent to Form 15CA
  • Form No. 146 – equivalent to Form 15CB

These forms are notified under the Income Tax Rules, 2026, ensuring continuity with structured compliance while modernising procedural aspects.‑ax Rules, 2026, ensuring continuity with structured compliance while modernising procedural aspects.

Treatment of Forms Filed before 31 March 2026

A key transitional clarification relates to forms filed under the old law. Forms 15CA and 15CB already submitted for remittances made on or before 31 March 2026 remain valid even after the new Act comes into force from 1 April 2026, provided that:

  • The remittance is actually made within the validity period mentioned in such forms.

As per prevailing practice, where remittance is not completed within the proposed date specified in Form 15CA/15CB, fresh forms must be filed prior to processing the payment.

Applicability for Remittances on or after 1 April 2026

For remittances made on or after 1 April 2026, the following will apply:

  • Statute: Income Tax Act, 2025‑ax Act, 2025
  • Forms: Form No. 145 and, where applicable, Form No. 146
  • Rules: Income Tax Rules, 2026‑ax Rules, 2026

Importantly, the substantive requirements remain unchanged—remitters must continue to ensure correct evaluation of taxability, application of DTAA benefits where relevant and appropriate deduction of tax at source.

Thresholds under the New Rules

The thresholds for filing information and obtaining a CA certificate are prescribed under Rule 220 of the Income Tax Rules, 2026. The rules retain thresholds broadly similar to those applicable under the earlier regime, ensuring minimal compliance disruption for taxpayers during transition.‑ those applicable under the earlier regime, ensuring minimal compliance disruption for taxpayers during transition.

Accrual vs Remittance: Which Law Applies?

A practical issue arises where remittance is made after 1 April 2026 for a liability that accrued before that date. The position clarified under the transition framework is:

  • Procedural law (forms and reporting): Governed by the law in force on the date of remittance, i.e., the Income Tax Act, 2025.‑ Act, 2025.
  • Substantive tax law (taxability and TDS rates): Governed by the law applicable in the year of accrual, i.e., the Income Tax Act, 1961.‑ Act, 1961.

This distinction ensures consistency with established principles separating procedural compliance from charging provisions.

Structure of Form 145 under the Income Tax Rules, 2026

Form No. 145 adopts a four-part structure, similar to erstwhile Form 15CA:

  • Part A: Taxable remittances where aggregate does not exceed ₹5 lakh during the year
  • Part B: Taxable remittances exceeding ₹5 lakh where an Assessing Officer’s certificate has been obtained under section 395(1)/(2)
  • Part C: Taxable remittances exceeding ₹5 lakh supported by a CA certificate in Form No. 146
  • Part D: Remittances not chargeable to tax (excluding specified transactions)

Key Compliance Improvement

Under the new framework, where Part B is filed based on an Assessing Officer’s certificate, Part C is not required. This eliminates duplication that existed earlier and reduces both effort and cost for taxpayers.

Introduction of UDIN in Form 146

Form 146 mandates quoting of UDIN (Unique Document Identification Number). The UDIN enables:

  • Real‑time verification through ICAI systems
  • Authentication of CA certificates
  • Prevention of forged or unauthorised certifications

Only those Form 146 submissions with a valid UDIN are accepted, strengthening the credibility of the compliance system.

CA Certificate Not Required Where AO Certificate Exists

A significant relaxation under the new regime is that where the remitter furnishes Part B of Form 145 along with an Assessing Officer’s certificate, Form 146 is not required. This reduces compliance burden and duplication, reflecting a taxpayer‑friendly approach under the Income‑Tax Act, 2025.

Conclusion

The transition from Forms 15CA and 15CB to Forms 145 and 146 under the Income Tax Act, 2025 represents an evolution rather than a disruption. While the core objective of safeguarding tax compliance on foreign remittances remains unchanged, procedural efficiency, reduced duplication, and enhanced digital verification mark notable improvements.

Taxpayers and professionals must familiarise themselves with the applicable cut‑off dates, form structures, and dual‑law application principles to ensure smooth compliance during and after the transition phase starting 1 April 2026.