Income Tax Update 2026: If you have ever transferred money from India to another country—whether to pay tuition fees, support family members, make overseas investments, or handle business payments—you already know it is not as simple as clicking a “send” button on your banking app.
As of 2026, the process has been made even more structured.
The Income Tax Department has put forth a crucial change for foreign remittance, altering how remittances will be reported and processed.
The existing system of using Forms 15CA and 15CB has been done away with and replaced with two new forms – 145 and 146.
Although the terms might seem technical, this change has a direct impact on every individual that transfers money to another country; it adds a layer of documentation that needs to be completed before any funds can be wired out from India.
Let’s break down the situation in simple terms and understand what it means for the average taxpayer.
Income Tax Update 2026: Why Were Forms 145 and 146 Introduced?
Foreign remittance is a highly sensitive aspect of any financial system. Whenever money flows out of India to any foreign destination, there are two primary things that tax authorities check for:
- The money is used legally and not to evade tax obligations.
- Compliance is strictly maintained to keep things clear.
Two specific forms, namely Form 15CA and Form 15CB, were being used for these purposes earlier; however, the process was quite disorganised and often complicated for the sender as well as banks.
To make the process much simpler and to standardise the entire operation, the government has decided to use Forms 145 and 146.
These forms primarily aim to:
- Streamline the reporting process for foreign payments
- Increase the clarity of tax declarations
- Make the compliance requirements structured and standardised.
- Eliminate confusion among senders, banks and CAs
Overall, the new mechanism has been designed to take a closer look at the process, but for individuals, it means that one more compliance step has been added.
Income Tax Update 2026: What is Form 145?
For all the senders of foreign remittances, Form 145 is the basic first requirement.
It is a self-declaration, which you, as the sender of the remittance, have to fill.
It essentially acts as an affirmation from your side to the tax department and bank that the remittance meets the necessary guidelines.
Income Tax Update 2026: What is to be filled in Form 145?
In Form 145, you would be asked about:
- The reason for the remittance (education, studies, family support, investments, etc.)
- The total value of money that is being sent abroad
- Personal details of you (sender) and the recipient (individual/organisation)
- Information on Tax Deducted at Source (TDS) in case any has to be deducted
- A clear indication on whether the transaction is taxable or non-taxable
Form 145 serves as the primary checkpoint before your money is sent out of the country.
Income Tax Update 2026: When must you use Form 145?
As long as you transfer money out of India as a foreign remittance, you must submit Form 145.
Usually, banks and their representatives ask for Form 145 before they accept or approve a foreign remittance.
Therefore, for small remittances like studies or family support, you will likely need to fill out Form 145 based on the amount and type of transaction.
Income Tax Update 2026: What is Form 146?
While Form 145 can be self-declared, Form 146 involves another important certification, and that is from a Chartered Accountant (CA).
Not all remittances need this kind of certificate from a CA; however, it is a must when the scenario demands expert financial advice.
Income Tax Update 2026: What does Form 146 certify?
This certificate typically confirms whether:
- The transaction qualifies as taxable under the Indian Income Tax Act
- Which clauses and provisions under the income tax law apply to the payment
- A definite confirmation on the correct TDS rate required
- Whether the transaction is compliant from all aspects
In simple terms, it serves as a professional assurance of your transaction.
Income Tax Update 2026: When is Form 146 required?
Some of the scenarios where Form 146 is mandatory are:
- If the payment being sent out of India is of a business nature
- If you are sending payments for consultancy, services, commissions, royalties, etc.
- If there is a high possibility of the transaction being taxable
- If you are specifically asked for it by the bank or authorised dealer
- If the transaction requires a CA certificate for regulatory reasons
A minor, personal transfer abroad will certainly not need this form, but in case of complex business-related foreign remittances, a CA certificate is mandatory.
Income Tax Update 2026: Who do these rules apply to?
These new rules apply to individuals as well as business entities.
You are affected by this change if you meet any of the following criteria:
- Are sending funds to any NRIs or foreign individuals abroad
- Are paying for services or contracts to companies abroad
- Are sending money abroad for studies or travel expenses
- Are transferring money abroad for investment purposes
- Are involved in international business dealing with clients or vendors overseas
Generally speaking, if you are transferring money from India to an individual or organization residing in a foreign country, you are required to follow these rules.
Authorised dealers and banks are an essential part of this process and most of the time will not process any remittance unless all required documentation is submitted.
Income Tax Update 2026: When can Form 146 be dispensed with?
In some situations, only Form 145 might suffice if the bank or financial institution determines that the transaction does not meet taxable criteria and no special certification is needed for the remittance to proceed.
However, individuals cannot make assumptions; it’s always best to enquire.
This is why the entire process has become so strict—because even small discrepancies can lead to major problems, such as:
- Unnecessary delays in transfers
- Queries from the bank needing more information
- Re-submission of forms
- Blockage of the remittance until all formalities are completed
To ensure you face no such hassle, particularly during urgent transfers like paying tuition fees or business deadlines, it is important to ensure all the documents are filled correctly.
The ultimate goal behind Forms 145 and 146 is to prevent ambiguity and to enforce accountability in the remittance process.
Income Tax Update 2026: Why this matters more than you realise
On the surface, it may seem that only more paperwork has been added, but this process has been streamlined to improve the Indian economy.
It is now more important than ever to ensure all cross-border financial transactions are transparent and regulated, as money leaving India must also leave after proper documentation and compliance checks.
It is the government’s initiative to keep a check on all remittances that go out so that the entire system remains transparent and no entity uses the route to illegally avoid tax or any other regulations.
Income Tax Update 2026: Practical guide for international remittances in 2026
If you plan to send money abroad in 2026, here is a simplified guide:
- Always check with your bank beforehand whether it requires Form 145 alone or Form 146 as well.
- Understand what information must be submitted when filling out Form 145.
- Please have all recipient details ready in advance (account number, bank name, SWIFT code, etc.).
- For complex transactions or business-related ones, always consider consulting a chartered accountant.
