Last reviewed: 25 September 2026. Before an Indian bank sends money abroad, it usually needs the tax position documented through Form 145 (your declaration, formerly Form 15CA) and, where applicable, Form 146 (a CA's certificate, formerly Form 15CB). Getting these right avoids blocked remittances and under-deduction demands. This guide explains when each form is needed, the parts of Form 145, how TDS under section 393(2) and the DTAA fit in, a worked example for a payment to a US software vendor, and the documents required by payment type.
Which rules apply to your remittance
| Remittance date | Forms | Rule | TDS section |
|---|---|---|---|
| Up to 31 March 2026 | Form 15CA / 15CB | Rule 37BB (Income-tax Rules, 1962) | Section 195 (Income-tax Act, 1961) |
| From 1 April 2026 | Form 145 / 146 | Rule 220 (Income-tax Rules, 2026) | Section 393(2) (Income-tax Act, 2025) |
At a glance
When each form is needed
Broadly, a Form 146 certificate is required where the remittance is taxable and exceeds Rs 5 lakh in the tax year (unless you obtain a certificate from the Assessing Officer instead); smaller or non-taxable payments need only the relevant part of Form 145, and remittances in the specified list in Rule 220 (old Rule 37BB) of the Income-tax Rules may need neither. The correct combination depends on the amount and whether the payment is taxable in India.
The parts of Form 145
| Part | Broadly used for |
|---|---|
| Part A | Taxable remittance up to Rs 5 lakh in the tax year |
| Part B | Taxable remittance above Rs 5 lakh where a certificate from the Assessing Officer under section 395 is obtained |
| Part C | Taxable remittance above Rs 5 lakh with a Form 146 certificate from an accountant (details prefill from the filed Form 146) |
| Part D | Remittance not chargeable to tax |
The specified list: when no form is needed
Rule 220 (old Rule 37BB) of the Income-tax Rules carries a specified list of remittances for which Form 145/146 are not required. It is a list in the Income-tax Rules, not an RBI list, and the bank maps it through the purpose code on your remittance request. Typical entries on the list include:
| Nature of remittance | Examples |
|---|---|
| Investment abroad by a resident | Equity or debt investment in an overseas entity, overseas real estate |
| Imports | Advance payment against imports, payment towards imports |
| Personal remittances | Personal gifts and donations, travel for education including fees |
Check the current text of Rule 220 and your bank's purpose code before relying on an exemption; a wrong purpose code is a common reason a remittance is held.
TDS, DTAA and documents
Payments to non-residents from 1 April 2026 attract TDS under section 393(2) of the Income-tax Act, 2025 (old section 195). The CA's Form 146 confirms whether tax is deductible and at what rate, applying any DTAA benefit under section 159 (old section 90) supported by a Tax Residency Certificate under section 159(8)(a) and Form 41 (formerly Form 10F). Keep the invoice or agreement, payment details and the remittee's residency documents ready so the certificate is accurate and the bank can remit without delay. For the TRC and Form 41 mechanics, see our Form 41 and TRC guide.
Worked example: an Indian company paying a US SaaS vendor USD 20,000
An Indian private company pays its US software vendor USD 20,000 (about Rs 17 lakh at an assumed Rs 85 per USD) in October 2026. The CA preparing Form 146 works through the payment as follows:
- Characterise the payment. A plain subscription to standard, cloud-hosted software, with no transfer of copyright, is generally not "royalty" under Article 12 of the India-US DTAA, following the Supreme Court's 2021 decision in Engineering Analysis Centre of Excellence. If the vendor has no permanent establishment in India, the payment is business income that India cannot tax under the treaty.
- Check for bundled services. Suppose USD 5,000 of the invoice is for implementation and training that "make available" technical knowledge to the company's team. That part can be "fees for included services" under Article 12(4)(b) of the India-US DTAA, taxable at the treaty rate of 15%.
- Apply the lower of treaty and domestic rate. With a valid TRC and Form 41 from the vendor, TDS on the USD 5,000 service component (about Rs 4,25,000) at 15% is about Rs 63,750. The subscription component carries no TDS on this analysis.
- Certify and file. The CA issues Form 146 setting out the characterisation, the treaty articles and the rate. The company then files Form 145 Part C (the remittance is taxable in part and above Rs 5 lakh) and gives the acknowledgement to the bank.
Had the whole payment been a plain subscription with no taxable component, the remittance would be reported in Part D as not chargeable to tax. Many banks still ask for a CA's analysis on file in that case. Characterisation turns on the contract terms, so treat these numbers as illustrative.
Documents by payment type
| Payment | Documents the CA will ask for |
|---|---|
| Royalty (software licence, IP) | Licence agreement, invoice, TRC, Form 41, declaration of no PE in India, beneficial ownership declaration |
| Fees for technical services | Service agreement and scope of work, invoice, TRC, Form 41, no-PE declaration, details supporting the "make available" analysis where the treaty has one |
| Dividend | Board resolution, shareholding proof, TRC, Form 41, beneficial ownership declaration |
| Interest | Loan agreement, interest computation, RBI reporting reference for an external commercial borrowing where applicable, TRC, Form 41 |
Where this fits for foreign-owned Indian companies
Payments to a foreign parent, cross-charges for group services, and SaaS or licence fees to overseas vendors are the remittances Indian subsidiaries make most often, and each needs its own characterisation. We cover these as part of our foreign subsidiary accounting and FEMA service. NRIs moving money out of NRO accounts can see our USD 1 million repatriation guide.
Frequently asked questions
What are Form 145 and Form 146 (formerly 15CA and 15CB)?
From 1 April 2026, Form 145 (formerly Form 15CA) is the declaration by the person making a foreign remittance, and Form 146 (formerly Form 15CB) is a certificate from a chartered accountant confirming the taxability and the correct tax deduction on that remittance, under Rule 220 of the Income-tax Rules, 2026 (old Rule 37BB). Together they let the bank remit funds abroad with the tax position documented. Remittances up to 31 March 2026 used Forms 15CA/15CB.
When is Form 146 required?
Form 146 (the CA certificate) is generally required when the remittance is taxable and exceeds Rs 5 lakh in the tax year, unless you have a certificate from the Assessing Officer instead. Below that, or for certain specified payments, only parts of Form 145 may be needed.
When are Form 145/146 not required?
For remittances in the specified list in Rule 220 (old Rule 37BB) of the Income-tax Rules, and for certain small or non-taxable transfers, these forms may not be needed. The exact requirement depends on the nature and amount of the remittance.
Which parts make up Form 145?
Form 145 has Parts A to D depending on the amount and taxability - Part A for taxable remittances up to Rs 5 lakh in the tax year, Part B where an Assessing Officer's certificate is obtained, Part C where a Form 146 certificate is obtained, and Part D for non-taxable remittances.
How does TDS under section 393(2) (old section 195) connect?
Payments to non-residents from 1 April 2026 attract TDS under section 393(2) of the Income-tax Act, 2025 (old section 195). The Form 146 certificate confirms whether tax is deductible and at what rate, factoring in the applicable DTAA, before the bank processes the remittance.
What role does the DTAA play?
Where a Double Taxation Avoidance Agreement applies, it can reduce or remove the Indian tax on the remittance under section 159 (old section 90). The CA considers the DTAA, along with a Tax Residency Certificate under section 159(8)(a) and Form 41 (formerly Form 10F), in issuing Form 146.
What documents does the CA need for Form 146?
The invoice or agreement, the nature of the payment, the remittee's tax residency details (TRC, Form 41), and bank details - so the taxability and rate can be certified correctly.
What happens if these forms are not filed correctly?
The bank may not process the remittance, and incorrect or missing forms can lead to demands, interest and penalties on under-deducted tax, so accuracy matters.
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