Form 15CA is Now Form 145 — Foreign Remittance Compliance Under the New Income Tax Act 2025

📅  Updated as on: 8 June 2026

⚡ Subject to amendment — verify at incometax.gov.in

Every Indian business or individual that makes a payment to a non-resident or a foreign company has a compliance obligation before the remittance is processed. Under the Income Tax Act, 1961, this was managed through Form 15CA (self-declaration by the remitter) and Form 15CB (CA certificate), filed under Section 195(6) and governed by Rule 37BB of the Income Tax Rules, 1962.

From 1 April 2026, Form 15CA is now Form 145 and Form 15CB is replaced by Form 146 under the Income Tax Act 2025 and the Income Tax Rules 2026. The new framework governing foreign remittance compliance is covered under Sections 393, 395, 397, and 462 of the Income Tax Act 2025 read with Rule 220 of the Income Tax Rules 2026.

The substantive compliance philosophy is unchanged — the same taxability assessment, the same DTAA analysis, and the same TDS obligation continue. What changed is the form numbers, the rule references, the section citations, and the digital integration of the new forms with the income tax portal. This blog covers everything businesses, CAs, and finance teams need to know before their next foreign payment.

Part 1 — The Old Framework

📌  OLD FRAMEWORK — SECTION 195 + FORM 15CA/15CB (Income Tax Act, 1961) TDS on payments to non-residents: Section 195, Income Tax Act, 1961 Compliance form (self-declaration): Form 15CA — filed by remitter before remittance CA certificate: Form 15CB — issued by ICAI CA, certifying taxability Governing Rule: Rule 37BB, Income Tax Rules, 1962   When was Form 15CA required:   Part A: Remittance not taxable AND aggregate ≤ Rs.5 lakh in the year   Part B: Remittance not chargeable to tax (specific reasons — no CA certificate needed)   Part C: Remittance taxable AND aggregate > Rs.5 lakh — Form 15CB from CA required   Part D: Remittance not taxable under Income Tax Act at all (import of goods etc.)   Form 15CB (CA Certificate):   Required when: Part C — remittance is taxable and > Rs.5 lakh   Issued by: Chartered Accountant registered with ICAI   Contents: Nature of remittance, taxability, applicable rate, DTAA benefit if any   Must be obtained BEFORE filing Form 15CA Part C   TDS section: Section 195(1) — TDS on interest, royalty, FTS, other income to non-resident TDS threshold: NO threshold — applies to all payments with income element DTAA: DTAA rate applies if lower than domestic rate — same principle   Rule 37BB exemption list: 33 categories of payments exempt from Form 15CA/15CB   (imports, personal remittances below limits, certain LRS transactions)

Part 2 — The New Framework

📌  NEW FRAMEWORK — SECTION 393(2) + FORM 145/146 (Income Tax Act, 2025) TDS on payments to non-residents: Section 393(2), Income Tax Act, 2025   (Section 195 absorbed into unified Section 393 — Table Sl. No. 17 for non-residents)   Compliance form (self-declaration): Form 145 — replaces Form 15CA   Governing: Sections 393, 395, 397, and 462 of IT Act 2025 + Rule 220, IT Rules 2026   CA certificate: Form 146 — replaces Form 15CB   Issued by: Chartered Accountant registered with ICAI   Required before filing Form 145 Part C   Form 145 structure (same 4-part framework):   Part A: Remittance not taxable AND aggregate ≤ Rs.5 lakh (simpler filing)   Part B: Remittance not chargeable to tax — specific reasons stated   Part C: Remittance taxable AND aggregate > Rs.5 lakh — Form 146 required   Part D: Remittance not taxable under IT Act 2025 at all   NEW — Digital improvements:   Automated validation and online integration with IT portal   System pre-fills Part C details from Form 146   Improved classification reduces errors   Faster processing by banks and authorised dealers   Rule 220 (IT Rules 2026): Expanded exemption list vs old Rule 37BB   Additional categories of routine payments exempt from Form 145/146   Reduces compliance burden on standard business transactions   Substantive requirements: UNCHANGED   Same taxability assessment | Same DTAA analysis | Same TDS obligation   Same CA certification content | Same bank/AD verification process

Part 3 — Complete Comparison Table

Parameter	Old Act	New Act (2025)	Status
TDS provision for NR payments	Section 195	Section 393(2) [Sl. No. 17]	Changed
Self-declaration form	Form 15CA	Form 145	Changed
CA certificate form	Form 15CB	Form 146	Changed
Governing rule	Rule 37BB, IT Rules 1962	Rule 220, IT Rules 2026	Changed
Form structure — parts	4 parts (A, B, C, D)	4 parts (A, B, C, D)	Same
Rs.5L threshold for Part C	Yes — Part C if > Rs.5L	Yes — Part C if > Rs.5L	Same
CA certificate required for Part C	Yes — Form 15CB	Yes — Form 146	Same (new form)
TDS threshold	No threshold	No threshold	Same
DTAA applicability	Yes — DTAA rate if lower	Yes — continues	Same
Filing timing	Before remittance	Before remittance	Same
Bank/AD verification	Required	Required	Same
Digital integration	Manual/portal	Enhanced — automated validation	Changed
Exemption list	Rule 37BB — 33 categories	Rule 220 — expanded list	Changed
Forms already filed (15CA/15CB)	Valid for remittances before 1 Apr 2026	Honoured — transition provisions	Changed
Year reference	Previous Year / Assessment Year	Tax Year	Changed

Part 4 — Form 145 Parts Explained

Part	Condition	Form 145 Applicability	CA Certificate?
Part A	Remittance NOT taxable + aggregate ≤ Rs.5L in Tax Year	Simpler Form 145 Part A — basic details only	No — CA certificate not required
Part B	Remittance NOT chargeable to tax — with specific reason stated	Form 145 Part B — state reason for non-taxability	No — CA certificate not required
Part C	Remittance IS taxable + aggregate EXCEEDS Rs.5L in Tax Year	Form 145 Part C — with Form 146 acknowledgement attached	Yes — Form 146 from CA must be obtained FIRST
Part D	Remittance NOT taxable under IT Act 2025 at all	Form 145 Part D — import payments, capital transactions etc.	No — CA certificate not required

Part 5 — When TDS Applies Under Section 393(2)

TDS under Section 393(2) (old Section 195) applies when ALL of the following conditions are met:

• The payer is a person resident in India (individual, company, firm, etc.)
• The recipient is a non-resident (NRI, foreign company, OCI/PIO abroad)
• The payment has an income element — purely capital payments without income are assessed separately
• The income is chargeable to tax in India — either under the IT Act 2025 or a DTAA provision
• NO THRESHOLD: Even a payment of Rs.1,000 to a non-resident consultant triggers the TDS obligation if the income is taxable in India

If a DTAA exists between India and the recipient country and the DTAA provides for a lower rate — the DTAA rate applies. The recipient must provide:

• Tax Residency Certificate (TRC) from their home country
• Form 10F (self-declaration — old name continues under new Act for now)
• PAN or documentation of no-PAN (TDS rate increases to 20% without PAN)

Typical payments that attract TDS under Section 393(2):

• Royalties to foreign IP owners (software licenses, trademarks, patents)
• Fees for Technical Services (FTS) to foreign consultants or service providers
• Interest on External Commercial Borrowings (ECBs) and foreign loans
• Dividends to non-resident shareholders
• Payments to foreign freelancers, designers, developers
• SaaS subscriptions, cloud services from overseas providers (may involve royalty analysis)
• Capital gains payments to non-residents on sale of property/assets in India

✅  ACTION: Every overseas payment must be assessed for income element and taxability before processing. Use Form 145 for ALL such payments — even if TDS rate is Nil under DTAA. Filing Form 145 is a compliance obligation independent of whether TDS is deducted.

Part 6 — Transitional Provisions

✅ Forms 15CA/15CB already filed for remittances before 1 April 2026: Valid — use as filed ✅ Forms 15CA/15CB filed before 1 April 2026 for future remittances: Honoured if remittance within validity period ✅ New remittances on or after 1 April 2026: Must use Form 145 and Form 146 ✅ Old Rule 37BB exemption list: Continues to apply for existing remittance arrangements until Rule 220 is fully notified ✅ Pending refund claims for excess TDS under old Section 195: Continue under old Act proceedings ✅ Assessment and proceedings for past years: Continue under old Act provisions (Section 536 savings clause)

✅  ACTION: Update all finance and accounts team SOPs to use Form 145 (not Form 15CA) and Form 146 (not Form 15CB) for all foreign remittances made on or after 1 April 2026. Update legal agreements and bank instructions that reference old form numbers.

Part 7 — Action Checklist for Finance Teams

1. Identify all recurring foreign payments — SaaS subscriptions, royalties, consultant fees, loan interest, dividends to NRI shareholders.
2. For each payment category: Assess taxability under IT Act 2025 and applicable DTAA. If in doubt, obtain a CA opinion.
3. For payments on or after 1 April 2026: File Form 145 (not Form 15CA) before remittance.
4. For taxable payments exceeding Rs.5 lakh: Obtain Form 146 from a CA before filing Form 145 Part C.
5. Collect TRC and Form 10F from all non-resident recipients claiming DTAA benefits — these requirements continue unchanged.
6. For non-residents without PAN: TDS at 20% or DTAA rate, whichever is higher. PAN/ATIN requirements continue.
7. Update bank mandates and authorised dealer instructions: Reference Form 145 and Form 146 for remittance processing.
8. Deduct TDS under Section 393(2) where applicable. Deposit TDS using relevant payment code. File quarterly Form 140 returns (non-salary TDS).

Key Takeaways

• Form 15CA is replaced by Form 145. Form 15CB is replaced by Form 146. Effective for all foreign remittances on or after 1 April 2026.
• Governing provisions: Sections 393, 395, 397, and 462 of IT Act 2025 + Rule 220 of IT Rules 2026 (was Section 195(6) + Rule 37BB of old Act).
• TDS on non-resident payments: Now under Section 393(2) — same structure, no threshold, same DTAA principles.
• Form 145 has the same 4-part structure as old Form 15CA. Form 146 is the CA certificate equivalent of old Form 15CB.
• Part C still requires CA certificate (Form 146) when remittance is taxable and exceeds Rs.5 lakh in the Tax Year.
• Substantive requirements unchanged: Same taxability assessment, same DTAA analysis, same TDS obligation, same bank/AD verification.
• Rule 220 (new) expands the exemption list beyond old Rule 37BB — fewer routine payments need Form 145/146.
• Forms 15CA/15CB already filed for pre-April 2026 remittances: Valid under transition provisions.

Frequently Asked Questions

Q: We have a monthly software subscription to a US SaaS company. Do we need Form 145 every month? A: It depends on the nature of the payment and whether it constitutes a royalty under the India-US DTAA. If the subscription involves a license for the right to use software (not just a service), it may attract withholding tax as royalty. If taxable, file Form 145 (Part A or C depending on aggregate amount in the Tax Year). Consult a CA for the specific characterisation under the DTAA. Many SaaS payments are now structured to be non-royalty — but confirm for your specific contract. Q: Our Form 15CB was issued by our CA for a remittance in March 2026 but the payment will be made in April 2026. Is the old Form 15CB valid? A: Under the transitional provisions, Forms 15CA and 15CB filed before 1 April 2026 are honoured for remittances made within the validity period specified in the forms. If the remittance is made in April 2026 and the old Form 15CB was filed before April 2026 specifying a date range that covers the April remittance — the old form should be valid. However, verify the specific bank’s position as practice may vary. If in doubt, obtain a fresh Form 146 to avoid any processing issues. Q: We pay dividends to foreign shareholders. Does Section 393(2) apply? A: Yes. Dividends to non-resident shareholders are subject to TDS under Section 393(2) (old Section 195). The TDS rate is 20% (plus surcharge and cess) unless a DTAA between India and the shareholder’s country provides a lower rate. The shareholder must provide a Tax Residency Certificate and Form 10F to claim the DTAA rate. File Form 145 before the dividend remittance. Q: Is an individual sending personal remittances abroad required to file Form 145? A: Personal remittances under the Liberalised Remittance Scheme (LRS) up to USD 250,000 per year for permitted purposes (travel, education, medical, gifts, maintenance, etc.) are exempt from Form 145 under the expanded Rule 220 exemption list. However, if an individual is remitting payment with an income element — for example, paying royalty to a foreign party or repaying a foreign debt with interest — Form 145 requirements apply. For routine personal LRS remittances, the bank/AD handles the documentation under RBI guidelines.

Form 15CA -> Form 145 | Form 15CB -> Form 146 | Effective: 1 April 2026 Section 195 -> Section 393(2) | Rule 37BB -> Rule 220 | IT Rules 2026 4-part structure unchanged: Part A (≤5L), Part B (not taxable), Part C (taxable >5L + CA cert), Part D Form 146 (CA certificate) required for Part C — same as old Form 15CB requirement No threshold on TDS — all NR payments with income element covered DTAA rates continue — TRC + Form 10F required from NR recipient Substantive requirements unchanged — only form numbers and rule references changed Rule 220: Expanded exemption list — fewer routine payments need Form 145/146

⚠  DISCLAIMER This article is published for general informational and educational purposes only. Form 145, Form 146, Rule 220, and Section 393(2) references are based on the Income Tax Act 2025 and Income Tax Rules 2026 as understood on the date of publication. Foreign remittance compliance is a complex area involving FEMA, DTAA, RBI guidelines, and income tax law — always consult a qualified CA and authorised dealer before processing remittances. For support: info@fimaco.in | fimaco.in.