Form 15CA to be Replaced by Form 145? Big Changes Proposed in Foreign Remittance Reporting under New Income Tax Rules 2026
Foreign remittances from India are set to undergo a major compliance shift. If the draft Income Tax Rules 2026 are notified in their current form, the long-familiar Form 15CA may soon be replaced by Draft Form No. 145.
This is not merely a cosmetic renumbering. The proposed new form reflects the government’s move toward data-driven tax monitoring, tighter reporting standards, and clearer classification of cross-border payments. For businesses making overseas payments, finance professionals, and tax practitioners, the change could significantly alter documentation requirements.
Let us understand what the proposed shift means and how it may affect taxpayers.
Why the Shift from Form 15CA to Form 145 Matters
Form 15CA has been the backbone of foreign remittance reporting for years. It functioned primarily as a declaration regarding tax deduction at source (TDS) on payments made to non-residents.
However, authorities have increasingly faced challenges such as:
• Misclassification of payments
• Incomplete details of foreign recipients
• Lack of precise tracking of remittance purposes
• Limited integration between tax and banking reporting systems
Draft Form 145 appears to address these issues by demanding more specific disclosures and structured data capture.
1. Detailed Classification of Nature of Remittance (65 Categories)
Perhaps the most important operational change is how the purpose of remittance is to be reported.
Under the existing Form 15CA, taxpayers mainly relied on the RBI purpose code to describe the transaction. While useful, this system often allowed room for interpretation and broad categorisation.
Draft Form 145 proposes a predefined list of around 65 specific categories from which the taxpayer must select the exact nature of payment.
Examples include:
• Software licence fees
• Bandwidth charges
• Cloud services or AMC payments
• Directors’ remuneration
• Crypto or lottery winnings
• Technical service payments
Impact on taxpayers
This structured list removes ambiguity. It will become difficult to classify a payment for technical services as ordinary business income merely through generic description.
From a compliance perspective, this means:
• Greater scrutiny of TDS applicability
• Easier identification of royalty or FTS payments
• Automated analytics by the tax department
• Reduced flexibility in describing transactions
In short, precision will replace discretion.
2. Stronger Identification of Non-Resident Recipient
Another notable change is the enhanced information required about the foreign recipient.
Draft Form 145 proposes mandatory reporting of:
• Tax Identification Number (TIN) in the country of residence
• Country code and contact number
• Email address of the recipient
• More structured identity details across all parts of the form
Why this matters
Many remittance filings today contain minimal recipient information, particularly in small or repetitive payments. The new form signals that authorities want traceable, verifiable non-resident identities.
This change could have practical implications:
• Vendor onboarding procedures may need revision
• Companies may need to collect foreign tax IDs upfront
• Payment approvals may get delayed if recipient data is incomplete
• Documentation burden on finance teams will increase
Businesses that rely heavily on foreign vendors should begin updating their vendor master records now.
3. Separate Reporting of Authorized Dealer (Bank) Details
Draft Form 145 introduces a new reporting segment for the Authorized Dealer (AD) bank handling the remittance.
The form proposes disclosure of:
• Name of the Authorized Dealer
• Specific reporting details
• I TDREIN (Income Tax Department Reporting Entity Identification Number)
Possible intent behind this change
This suggests deeper integration between banking channels and income-tax reporting systems. The move could allow the department to cross-verify:
• Bank-reported foreign remittances
• TDS declarations
• Form filings
• Remittance classification
This may reduce mismatches and strengthen audit trails for cross-border transactions.
What This Means for Businesses and Finance Professionals
If notified, Form 145 would mark a shift toward structured, analytics-friendly compliance reporting. The message is clear: vague remittance descriptions and incomplete recipient details will no longer be acceptable.
Practical action steps to consider now
Businesses should start preparing in advance by:
– Reviewing foreign vendor master data
– Collecting Tax Identification Numbers (TIN) of overseas parties
– Updating vendor contact information
– Classifying services according to likely new categories
– Rechecking TDS applicability for each type of payment
– Aligning finance and compliance teams on documentation standards
Early preparation will help avoid disruption when the new form becomes operational.
Conclusion: A Move Toward Data-Driven Remittance Compliance
The proposed replacement of Form 15CA with Form 145 signals a broader policy direction – from declaration-based reporting to structured data capture and automated verification.
While the draft rules are yet to be formally notified, the proposed framework shows how cross-border payments may soon be monitored more closely.
For taxpayers, the safest approach is to treat this as an early compliance warning and begin strengthening documentation systems now.
Because in the new tax environment, clarity of data may matter as much as correctness of tax deduction.
