By CA Surekha Ahuja
Effective from: 1 April 2026
Applicable for: FY 2026–27 onwards
Introduction
Form No. 146 replaces Form 15CB as part of a major compliance transition under Section 393 of the Income-tax Act, 2025 read with Rule 220 of the Income-tax Rules, 2026.
This change is not merely procedural. It introduces enhanced disclosure, stricter validation, mandatory UDIN integration, and a structured pre-filing workflow, making foreign remittance certification more accountable and audit-ready.
Form 146 is mandatory for foreign remittances exceeding ₹5 lakh to non-residents and must be obtained prior to remittance.
What is Form 146
Form 146 is a Chartered Accountant certificate required to determine taxability, applicable withholding tax, and DTAA eligibility for foreign remittances. It replaces Form 15CB and is a pre-condition for remittance through authorised dealer banks.
Form 146 vs Form 15CB – Key Differences
The transition introduces the following critical changes:
Legal Framework
Earlier governed by Section 195 and Rule 37BB, now replaced by Section 393 and Rule 220.
Disclosure Requirement
Form 146 contains 28 mandatory fields compared to 21 earlier, increasing compliance depth.
CA Authorisation
Earlier direct filing. Now mandatory pre-authorisation through “Add CA” on portal.
Signature Requirement
Digital Signature Certificate is mandatory. EVC is no longer permitted.
UDIN Requirement
Earlier recommended. Now mandatory for every certificate.
ARN Structure
Upgraded from 14-digit to 15-digit ARN.
Filing Mode
Bulk upload discontinued. Online filing only.
Portal Selection
Now requires selection under “Certificate” with manual description as Form 146.
DTAA Reporting
Enhanced reporting including TRC, TIN, article reference and limitation clause.
Permanent Establishment Analysis
Now mandatory and must be documented.
TDS Reporting
Standardised reporting primarily in INR.
Rectification Mechanism
No revision allowed. Cancellation and fresh filing required.
Structural Enhancements in Form 146
Form 146 introduces several new reporting requirements, including:
- Tax Residency Certificate details
- Foreign tax identification number
- Permanent Establishment status
- DTAA article and limitation clause
- Surcharge and cess computation
- Contract reference details
- Income classification
These changes reflect a shift toward substantive tax validation rather than procedural compliance.
When is Form 146 Required
Form 146 is required where:
- Payment is made to a non-resident or foreign entity
- Aggregate remittance exceeds ₹5,00,000
- Taxability or withholding needs certification
It must be obtained before remittance.
Filing Process for Form 146
Stage 1: Remitter Authorisation
- Login to income-tax portal
- Add Chartered Accountant under “Authorised Representatives”
- Select Form 146 and submit
Stage 2: Filing by Chartered Accountant
- Access Form 146 under e-filing portal
- Complete remitter, payee, and transaction details
- Perform DTAA and tax analysis
- Generate UDIN
- Sign using DSC
- Submit and generate 15-digit ARN
Stage 3: Form 145 Filing
- Remitter files Form 145 Part C
- Quotes ARN
- Completes remittance process
Alternative Method
Upload DSC-signed PDF under “Certificate” category with description as Form 146 under Section 393. This method is valid and widely accepted.
UDIN Requirement for Form 146
UDIN is mandatory for Form 146 as it is a Chartered Accountant certificate.
Current Position
The UDIN portal does not yet specifically list Form 146 under the Certificates category. Temporary guidance allows selection under GST or Tax Audit.
Correct Professional Approach
- Select Certificates Others
- Use description such as Form 146 under Section 393 for foreign remittance
Recommended Practice
- Prefer correct classification under Certificates Others
- Use alternate category only where system constraints exist
- Maintain UDIN documentation for verification and audit trail
TDS Rates under Section 393
Tax deduction depends on nature of income, Permanent Establishment status, and DTAA provisions.
Indicative structure:
- Business income approximately 20 percent
- Fees for technical or professional services 10 to 20 percent
- Non-treaty or default cases up to 40 percent
Surcharge and Health and Education Cess apply additionally.
Proper DTAA documentation including Tax Residency Certificate is essential.
Rectification under Form 146
Form 146 cannot be revised.
- Errors require cancellation and fresh filing before ARN utilisation
- Post-ARN corrections are handled through Form 145 rectification
This represents a stricter compliance regime compared to earlier provisions.
Compliance Requirements
- PAN and TAN validation
- Mandatory CA authorisation
- DSC authentication
- UDIN generation
- Accurate tax computation
- Proper DTAA and PE analysis
- Correct ARN linkage
Penalty and Risk Exposure
Failure to comply may result in:
- Monetary penalty per remittance
- Tax liability for short deduction
- Prosecution for false certification
- Disciplinary action against professionals
Threshold and Alternatives
- Up to ₹5 lakh: Form 145 self-declaration
- Above ₹5 lakh: Form 146 mandatory
Alternatives include:
- Assessing Officer certificate
- Lower or nil deduction certificate
Frequently Asked Questions
Form 146 replaces Form 15CB from 1 April 2026.
It applies where foreign remittance exceeds ₹5 lakh.
UDIN is mandatory and should preferably be generated under Certificates Others.
Digital Signature Certificate is compulsory.
Form 146 cannot be revised and must be refiled in case of error.
Permanent Establishment analysis is now mandatory.
DTAA reporting requires detailed documentation including TRC and treaty article.
Bulk filing is not available currently.
ARN is now a 15-digit number.
Form 15CB is valid only up to FY 2025–26.
Practical Action Plan
- Update internal processes to adopt Form 146 workflow
- Train teams on CA authorisation and UDIN requirements
- Test portal filing including certificate upload method
- Inform clients about new compliance requirements
- Ensure Digital Signature Certificates are valid
Conclusion
Form 146 represents a significant upgrade in foreign remittance compliance with enhanced reporting, stricter validation, and greater professional accountability.
It is not merely a replacement of Form 15CB but a shift toward a more robust and transparent certification framework.
A structured approach to tax determination, UDIN compliance, and documentation is essential to ensure accurate and defensible compliance under Section 393.
