The Income Tax Department has introduced a revamped compliance framework for foreign remittances by replacing Form 15CA and Form 15CB with Form 145 and Form 146. This change is not merely a renaming exercise—it reflects a shift towards a more digital, structured, and traceable system for monitoring outward remittances by Non-Resident Indians (NRIs).
This updated framework is particularly relevant for NRIs repatriating funds under the USD 1 Million Scheme, where regulatory scrutiny and documentation accuracy are critical.
Understanding the New Forms: Form 145 & Form 146
The new forms align closely with their predecessors but include enhanced reporting and compliance features:
- Form 145 (Earlier Form 15CA):
This is the remitter’s online declaration filed on the income tax portal. - Form 146 (Earlier Form 15CB):
This is the Chartered Accountant’s certificate confirming tax compliance on the remitted amount.
Structure of Form 145
Form 145 continues to be divided into four parts, similar to the earlier Form 15CA:
- Part A – Applicable for remittances up to ₹5 lakh
- Part B – Applicable when an Assessing Officer (AO) certificate is obtained (Form 146 not required)
- Part C – Applicable for remittances above ₹5 lakh where CA certification (Form 146) is mandatory
- Part D – Applicable for non-taxable or exempt remittances
The updated structure ensures clearer classification and better reporting of remittance purposes.
Key Changes: The “Big Three” Compliance Additions
The new framework introduces three major enhancements that significantly improve transparency and verification:
- UDIN Integration
Form 146 now mandatorily includes the Unique Document Identification Number (UDIN). This 18-digit number validates the authenticity of the Chartered Accountant’s certificate and reduces the risk of fabricated documentation.
- Tax Residency Certificate (TRC) Requirement
A significant addition is the requirement to report the Tax Residency Certificate (TRC) details of the recipient/remittee. This was not required under the earlier Form 15CB and adds an extra layer of tax jurisdiction verification.
- Fully Digital Verification System
The entire process is now digitally aligned, enabling real-time verification by banks and tax authorities. This reduces manual intervention and improves efficiency in processing remittances.
Impact on the USD 1 Million Repatriation Scheme
Under the Liberalised Remittance framework for NRIs, up to USD 1 million per financial year can be repatriated from India. This includes funds from:
- Sale of property
- Rental income
- Interest income
- Gifts or inherited funds
Important Considerations
- Tax Collected at Source (TCS):
Generally, TCS is not applicable when remitting own tax-paid funds. - Bank Requirements:
Although Form 146 may not be legally mandatory in certain cases (e.g., remittances below ₹5 lakh or exempt transactions), most banks require both Form 145 and Form 146 as part of internal compliance and due diligence procedures.
Step-by-Step Process for NRI Fund Repatriation
For NRIs planning to transfer funds abroad or to an NRE account, the following process should be followed:
- Contact the NRO Bank
Initiate the request and understand documentation requirements for repatriation. - Identify Source of Funds
Ensure that the income (rent, sale proceeds, interest, etc.) is tax-paid in India. - Obtain Tax Residency Certificate (TRC)
Secure the TRC from the country of residence. - Obtain CA Certificate (Form 146)
A Chartered Accountant verifies tax compliance and issues Form 146 with UDIN. - File Form 145
Submit the remitter’s declaration (typically Part C) on the income tax portal using details from Form 146. - Submit Documents to Bank
Provide Form 145, Form 146, PAN, and supporting documents such as bank statements or sale deeds.
Conclusion
The introduction of Form 145 and Form 146 marks a significant step towards greater transparency, digital compliance, and real-time verification in NRI fund repatriation. While the procedural structure remains familiar, the added requirements such as UDIN integration and TRC reporting make the system more robust and reliable.
For NRIs, the key to smooth repatriation lies in maintaining proper documentation and ensuring tax compliance. With the updated framework, accurate reporting and timely submission can help avoid delays and facilitate seamless fund transfers.
Ushma & Associates – Chartered Accountants
📞 Contact: +91-9910075924
Disclaimer
This article is for general informational purposes only and does not constitute professional advice. Laws are subject to changes, and interpretations may vary.
Readers are advised to consult a qualified professional before making any decisions.
