What is Form 146 and How Will It Change Foreign Remittances from India Under Income-tax Act, 2025?

With the enforcement of the Income-tax Act, 2025 and corresponding rules, the long-standing Form 15CA / 15CB mechanism has been replaced. From 1 April 2026, taxpayers and professionals must transition to a new framework comprising Form 145 and Form 146.

While at first glance this may appear to be a mere renumbering, the change actually reflects a deeper shift towards tighter compliance, enhanced reporting, and increased accountability, particularly for Chartered Accountants certifying such transactions.

What is Form 146?

Form 146 is the new Chartered Accountant certificate required in cases involving foreign remittances that are taxable in India. It replaces the earlier Form 15CB and operates under Section 393 of the Income-tax Act, 2025.

The purpose of this certificate remains broadly similar—to ensure that tax has been properly evaluated and deducted before funds are remitted outside India. However, the new format introduces more structured disclosures and digital validation, making the process more robust.

When is Form 146 Applicable?

Form 146 becomes mandatory in situations where a payment is made to a non-resident or foreign entity, and such payment is chargeable to tax in India. Additionally, the requirement typically applies where the aggregate remittance exceeds ₹5 lakh in a financial year, and no lower/nil deduction certificate has been obtained from the tax authorities.

Thus, the trigger for Form 146 continues to be taxability plus threshold, similar to the earlier regime.

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What Does the CA Certify in Form 146?

It is important to clearly understand the scope of certification. A Chartered Accountant issuing Form 146 certifies:

The nature and purpose of the remittance
Whether the income is taxable in India under domestic law
Applicability of Double Taxation Avoidance Agreements (DTAA)
The correct rate of TDS and its compliance

Crucially, this certification is based strictly on existing documents and facts, such as agreements, invoices, and tax residency certificates. It does not extend to guaranteeing future utilisation of funds, which remains beyond the professional scope of certification.

Key Differences from Form 15CB

Although Form 146 replaces Form 15CB, the transformation goes beyond a simple name change. The new system introduces a more technology-driven and compliance-oriented structure.

The earlier framework under the Income-tax Act, 1961 has now been replaced with a system under the 2025 law, backed by enhanced reporting requirements, stricter validations, and defined penalty provisions. While the threshold and overall purpose remain similar, the level of scrutiny and documentation has increased significantly.

How Form 145 and Form 146 Work Together

The compliance process now follows a linked workflow. The remitter is first required to file Form 145 (which replaces Form 15CA). Based on the details provided, the case is assigned to a Chartered Accountant through the e-filing portal.

The CA then examines the documents and files Form 146, after which the remittance can be processed through the authorized dealer bank. This integration ensures end-to-end traceability and validation of foreign remittances.

Major Changes Introduced

One of the most notable changes is the shift to event-based compliance, where Form 146 must be filed for each qualifying transaction rather than relying on broad declarations.

The system is now fully digital, requiring online submission, digital signatures, and integration with UDIN for authenticity. Additionally, the nature of remittances must be classified using structured categories, reducing ambiguity that existed earlier.

Another key change is the enhanced responsibility on Chartered Accountants, with penalties prescribed for incorrect certification, thereby reinforcing professional diligence.

Documentation Requirements

To issue Form 146, a Chartered Accountant must carefully review supporting documents such as agreements, invoices, remittance details, PAN/TAN information, and Tax Residency Certificates. In cases involving treaty benefits, a detailed DTAA analysis is also required.

This highlights the importance of proper documentation and due diligence, as the certification is only as strong as the records supporting it.

Situations Where Form 146 is Not Required

Form 146 is generally not required where the remittance is not taxable in India, falls under specified exemptions, or is below the prescribed threshold. However, compliance under Form 145 may still be necessary depending on the nature of the transaction.

Transition to the New Regime

The transition to the new framework is clearly defined. Transactions executed up to 31 March 2026 will continue under the old Forms 15CA and 15CB. From 1 April 2026 onwards, the new Forms 145 and 146 become mandatory.

Importantly, forms filed under the earlier regime will remain valid for past transactions, ensuring a smooth transition without retrospective disruption.

Practical Impact on Stakeholders

For Chartered Accountants, the new regime brings greater professional responsibility and scrutiny, requiring a deeper evaluation of taxability and supporting documentation.

For businesses and individuals, the process becomes more structured and transparent, though slightly more documentation-intensive. At the same time, the clarity in reporting is expected to reduce future disputes with tax authorities.

Conclusion

The introduction of Form 146 marks a significant evolution in foreign remittance compliance under the Income-tax Act, 2025. While the foundational principle remains unchanged, the framework now emphasizes accuracy, accountability, and digital integration.

Ultimately, this shift reinforces a critical principle:
certification must be based on facts and records—not assumptions or future intentions.

Foreign remittance is no longer just a procedural requirement—it is now a highly monitored tax compliance event.