Forget Forms 15CA and 15CB: Now, You Must Fill Out Forms 145 and 146 to Send Money Abroad

Income Tax Forms 145 and 146: The process for sending money abroad has undergone a change, as the government has issued new forms for reporting purposes. Learn how Forms 145 and 146 will simplify your transactions.

Income Tax Forms 145 and 146: If you wish to send money to a relative or friend residing abroad, this news is crucial for you. The Income Tax Department has implemented significant changes to the regulations governing foreign transactions (Foreign Remittances). The erstwhile Forms 15CA and 15CB have now been retired and replaced by Forms 145 and 146.

The primary objective of this change is to curb tax evasion and to ensure greater transparency regarding the flow of funds being remitted abroad.

What is Form 145, and why is it necessary?

Form 145 serves as a declaration form to be filled out by the individual initiating the remittance. In this form, you are required to specify the amount being remitted, the purpose of the remittance (Nature of remittance), and whether the applicable tax (TDS) has been deducted in accordance with the regulations. Your bank will proceed with the transaction only after you have duly filled out and submitted this form on the online portal. This form is mandatory for any individual making a payment to an NRI (Non-Resident Indian) or a foreign entity.

When is Form 146 required?

Form 146 is a certificate that you do not fill out yourself; instead, it must be certified by a Chartered Accountant (CA). This form is not mandatory for every transaction; however, it becomes a requirement in cases where the transaction is taxable or where the regulatory nuances involved are complex. Through this form, the CA certifies that the funds being remitted abroad have been subjected to tax deduction at the correct rate and that the transaction complies with the prevailing Income Tax regulations.

Can money be sent without these forms?

No, it has now been made mandatory for banks and Authorized Dealers to scrutinize these forms. If your transaction is not taxable, or if it falls under the purview of a specific exemption, you may be able to proceed using only Form 145, without the need for a CA Certificate (Form 146). However, if you are remitting funds abroad in the form of fees, payments for professional services, or a portion of substantial earnings, the bank will require you to submit both forms.

How will this change affect you?

The most significant impact is that you must now transition away from the old system and familiarize yourself with the new format. The old forms will no longer be accepted. If you do not possess the correct and up-to-date documentation, the bank may refuse to process your transfer, potentially resulting in delays in your payments. The government maintains a vigilant watch over foreign transactions; therefore, to avoid any complications, ensure that you have these forms ready *before* initiating any transaction.