"Every foreign remittance needs a CA certificate": What ITA 2025 actually says

Walk into almost any bank branch in India with a request to remit money abroad and you will hear the same sentence: "Sir, you need 15CA and 15CB from a CA." It is stated as though it were a universal rule. It is not. A large share of outward remittances — including some of the most common ones NRIs make — require no CA certificate at all, and a meaningful number require nothing beyond a simple self-declaration. The confusion has become worse since 1 April 2026, because the forms themselves have been renumbered and most branch staff are still working off the old mental model.

Here is what the law actually requires, and where the CA certificate genuinely is mandatory.

What the law actually says

The obligation to withhold tax on a payment to a non-resident sits in Section 195 of the Income-tax Act, 1961, carried forward into the Income-tax Act, 2025. The reporting machinery around it — the forms and the exemptions — sat in Rule 37BB of the Income-tax Rules, 1962.

From 1 April 2026, the forms changed names:

• Form 15CA is now Form 145 — the remitter's own declaration, filed on the income tax e-filing portal.
• Form 15CB is now Form 146 — the certificate issued by a Chartered Accountant.

Form 15CA and Form 15CB remain valid evidence of compliance for remittances initiated before 1 April 2026. You do not need to redo old paperwork. From that date forward, banks are looking for a Form 145 acknowledgement number.

The critical structural point most people miss is that Form 145 has four parts, and only one of them requires a CA certificate at all:

So the CA certificate in Form 146 is required in exactly one scenario: the payment is taxable in India, the aggregate for the tax year crosses ₹5 lakh, and you have not gone to the Assessing Officer for a lower or nil withholding order.

Note the words "tax year." The ITA 2025 abolishes the twin concepts of "previous year" and "assessment year" and replaces them with a single Tax Year. The ₹5 lakh threshold is an aggregate across the tax year, not per transaction — a point that trips up people making several mid-sized remittances.

The exempted purposes list

Separately from the four-part structure, there is a list of specified purposes — historically 33 of them under Rule 37BB — where no Form 145 or Form 146 is required at all, in any part. These are identified by RBI Purpose Codes and cover transactions that are, by their nature, not income chargeable in India. The categories include:

• Indian investment abroad — in equity capital, debt securities, branches and wholly owned subsidiaries, and real estate
• Loans extended to non-residents
• Advance payment against imports, and payment towards imports settled through operating accounts
• Intermediary trade, and imports by diplomatic missions
• Remittance towards business travel, travel under basic travel quota, and travel for pilgrimage, medical treatment or education
• Postal, railway, and airline operating expenses of Indian companies abroad
• Payments for maintenance of offices abroad
• Remittance by foreign embassies in India, and remittances by non-residents towards family maintenance and savings
• Remittance towards personal gifts and donations, donations to religious and charitable institutions abroad, and donations to international institutions
• Remittance towards grants and donations by the Central or State Government
• Contributions to international institutions, and payment of income tax
• Refunds or rebates of invoice value on imported goods
• Payments by residents for international bidding

There is one more exemption that stands entirely outside this list, and it is the one that matters most to individuals: an individual remitting under the Liberalised Remittance Scheme does not need to file Form 145 or obtain Form 146 where the remittance does not require prior RBI approval. This is why the branch demanding a CA certificate for a routine LRS transfer to your own overseas account is asking for something the law does not require.

Practical implications for NRIs

Consider four situations that arrive at very different answers.

Situation one — repatriating ₹40 lakh from your NRO account to your US account. The funds are your own post-tax money. The remittance itself is a transfer of capital, not a payment of income to a non-resident. But NRO repatriation is the one area where banks near-universally insist on the CA certificate, and here they are on defensible ground: the bank needs independent confirmation that the underlying income — rent, interest, capital gains — was taxed correctly before the money leaves. In practice you will complete Form 145 and obtain Form 146, and the CA will certify the source and the tax paid. The annual cap is USD 1 million per financial year from the NRO balance.

Situation two — your Indian company pays a US software vendor ₹3,20,000 for an annual licence. The payment may well be chargeable to tax as royalty or fees for technical services. But the aggregate is under ₹5 lakh for the tax year. Part A of Form 145 only. No CA certificate. If a second licence payment later in the same tax year pushes the cumulative figure past ₹5 lakh, you move into Part C territory from that point.

Situation three — you remit ₹18 lakh to your son studying in Canada, as maintenance and tuition. This falls under both the LRS exemption and the specified-purpose list for education and family maintenance. No Form 145. No Form 146. What does apply is TCS under Section 206C(1G), and here there is good news: from April 2026 the TCS rate on remittances for education, medical treatment and travel has been reduced to a flat 2%, replacing the earlier tiered structure. That TCS is a prepayment, fully creditable against your Indian tax liability or refundable if you have none.

Situation four — an Indian company pays ₹95 lakh in dividend to a non-resident shareholder in Singapore. Chargeable to tax, well over ₹5 lakh. Part C of Form 145 plus Form 146 from a CA. The certificate must record the DTAA article relied upon, the treaty rate applied, and confirm that a valid Tax Residency Certificate and Form 10F are on file. This is where the CA certificate earns its fee — an incorrect treaty rate here creates a Section 201 default that follows the payer, not the payee.

The asymmetry is worth internalising. The person who wrongly skips the certificate on a taxable ₹95 lakh dividend faces a short-deduction demand plus interest. The person who wrongly obtains a certificate on an exempt LRS education remittance has simply paid a fee they did not owe and delayed their transfer by a week. Banks are institutionally biased toward the second error. You should not be.

Step-by-step: what to do

• Identify the RBI Purpose Code for your remittance first. Your bank's A2 form requires it anyway. Check it against the specified-purpose list above. If it appears there, you are done — no Form 145, no Form 146.
• If you are an individual remitting under LRS and the transaction needs no prior RBI approval, the exemption applies. Say so in writing to the branch and cite the LRS carve-out. Keep a copy.
• If neither exemption applies, determine chargeability. Ask a single question: is this payment income accruing or arising in India in the hands of the non-resident? A payment for goods imported and delivered abroad generally is not. Royalty, interest, dividend, fees for technical services, and capital gains on Indian assets generally are.
• If it is not chargeable, file Part D of Form 145 yourself on the income tax e-filing portal. No CA involvement. You will need the recipient's name, address, country, the amount, the nature of the payment, and your own PAN and TAN.
• If it is chargeable, add up every remittance to non-residents in the current tax year. Under ₹5 lakh cumulative — Part A, self-filed, no certificate.
• Above ₹5 lakh, decide between the AO route and the CA route. If your treaty position is complex or contested, or you want certainty against a later Section 201 demand, apply to the Assessing Officer under Section 195(2) for a determination and file Part B. It takes longer but binds the department. Otherwise engage a CA for Form 146 and file Part C.
• For the Form 146 route, assemble the documents before the CA starts: the invoice or agreement, the recipient's Tax Residency Certificate for the relevant period, Form 10F filed on the portal, a no-permanent-establishment declaration where a treaty business-profits article is being claimed, and the RBI Purpose Code.
• File Form 146 first, then Form 145. The acknowledgement number of Form 146 is an input field in Part C of Form 145 — they cannot be filed in the other order.
• Give the bank the Form 145 acknowledgement number, not the PDF alone. Banks verify the acknowledgement against the portal. Keep both filings for at least eight years; foreign remittance data is matched against your return and generates the most common category of mismatch notice.

FAQ

My bank refuses to process an LRS education remittance without Form 15CB. What do I do?
Escalate above the branch. Write to the bank's nodal officer citing the LRS exemption from the Form 145/146 requirement and the specified-purpose category covering travel for education and family maintenance. Most banks reverse position at that level. If they do not, the remittance is still lawful with the certificate — you have paid a fee unnecessarily, not committed an error. The cost of escalating is a week; the cost of complying is typically ₹5,000 to ₹15,000.

I made three remittances of ₹2 lakh each to the same foreign consultant this tax year. Do I need Form 146 now?
Yes. The ₹5 lakh test is an aggregate across the tax year, not per transaction. Your cumulative figure is ₹6 lakh, so the third remittance falls into Part C and needs Form 146. The first two were correctly filed under Part A — those do not need to be redone.

I already have a lower-deduction certificate from my Assessing Officer. Do I still need a CA?
No. That is precisely what Part B of Form 145 exists for. You file Part B, quote the AO's certificate or order number under Section 195(2), 195(3) or 197, and no Form 146 is required regardless of the amount.

What is the penalty if I remit without filing Form 145 when it was required?
₹1,00,000 per default. Separately, if tax was chargeable and you under-deducted, you become an assessee-in-default under Section 201 for the shortfall plus interest at 1% per month from the date the tax was deductible to the date it was actually deducted, and 1.5% per month thereafter until deposit. The reporting penalty and the withholding consequence are independent — you can be hit with both on the same transaction.

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