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🏛️ Income Tax Act 2025 — Updated

Apply Form 145 (Form No.15CA) Payment to Non Resident Online

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CA Sagar Batra

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What is Form 145 Payment to Non Resident other than Company?

Form 145 (Form No.15CA) Payment to Non Resident other than Company is a mandatory declaration required before making payments to non-resident individuals, consultants, or foreign entities (other than companies). Its main purpose is to ensure proper Tax Deducted at Source (TDS) compliance and allow the Income Tax Department to monitor all cross-border transactions from India.

The form applies to income such as professional fees, services, royalties, interest, or dividends, and ensures all relevant taxes on these payments are properly deducted and reported as per Indian income tax laws under the Income-tax Act 2025.

💡 Who must file?

Anyone — individuals, businesses, LLPs, or partnership firms — making payments to non-residents (other than companies) must file Form 145 before remitting funds. Indian banks require the acknowledgment number of a successfully filed Form 145 to process any eligible cross-border payment.

The 4 Parts of Form 145

Part A

Taxable remittances up to ₹5 lakhs during the tax year. No CA certificate required.

Part B

Taxable remittances above ₹5 lakhs — with Assessing Officer's (AO) certificate under Sec 395.

Part C

Taxable remittances above ₹5 lakhs — with Chartered Accountant's certificate in Form 146.

Part D

Remittances that are not taxable in India — still requires declaration but no TDS deduction.

What Does "Non-Resident Other than Company" Mean?

A "non-resident other than company" typically includes:

  • NRI Individuals living outside India — e.g., an NRI who offers investment advice, conducts webinars, or consults for an Indian company
  • Foreign freelancers offering remote services — e.g., a US-based graphic designer or UK software developer working for Indian clients
  • Independent consultants based abroad — professionals in law, IT, business, or education contracted by Indian organisations
  • Foreign partners or shareholders receiving dividends or interest from Indian entities
⚠️ Who is exempt from filing?

Payments under the Liberalised Remittance Scheme (LRS) of RBI (educational fees abroad, gifts to relatives) are usually exempt. Remittances by IFSC units and certain RBI purpose code transactions (business travel, medical treatment) may also not require Form 145. Always verify with a CA.

What is TDS on Non-Resident Payments?

When you pay a non-resident for services or other taxable income, you are required to withhold a portion of that payment as tax — this is Tax Deducted at Source (TDS).

📌 Real-Life Example (CA Sagar Batra's Desk):

A Bengaluru startup engaged an NRI developer from Singapore for app development at ₹82,000 (approx $1,000). The startup cannot send the full amount. They must: (1) determine TDS applicability, (2) check India-Singapore DTAA, (3) deduct applicable TDS, (4) file Form 145 before the bank processes the wire transfer.

Common Payments Requiring TDS + Form 145

Payment Type Typical TDS Rate DTAA Benefit? Form Part
Professional / Consulting Fees 10–20% Yes Part A / C
Royalty / IP License Fee 10–25% Yes Part A / C
Interest to Overseas Lender 20–40% Yes Part A / C
Dividend to NR Shareholder 20% Yes Part A / C
Software Purchase / License 10–25% Yes Part A / C
Fees for Technical Services 10–20% Yes Part A / C
Non-taxable remittance Nil N/A Part D

*Rates are indicative. Actual rates depend on applicable DTAA and nature of income. Consult CA Sagar Batra for exact rates.

Who Needs to Use Form 145?

You must file Form 145 Payment to Non Resident other than Company if you are responsible for making any taxable payment to a non-resident (other than a company) or foreign entity from India. This includes:

Who Scenario Example Form 145 Required?
Individual Professional Outsourcing design to NRI freelancer Yes
Startup / Business Paying for foreign SaaS, marketing services Yes
LLP / Partnership Commission to overseas partner/consultant Yes
Paying under LRS for education Tuition fees to foreign university Exempt
IFSC Unit Remittances within IFSC framework Exempt
Paying foreign company (corporate) Service fee to a US Inc. Form 15CB/146

⚠️ Critical: The form must be submitted electronically before the remittance is processed by your bank. Banks will request the acknowledgment number from the filed Form 145 — without it, the payment will not proceed.

Quick Checklist — Do You Need Form 145?

  • The payment is NOT covered by an LRS or IFSC exemption
  • The beneficiary is a non-resident individual (not an Indian company)
  • The payment is for income taxable in India (professional fees, royalties, interest, etc.)
  • The remittance will be processed through an Indian bank or authorized dealer

Why Form 145 is Important

Filing this form is mandatory and forms a cornerstone of India's regulatory approach to foreign remittances.

Benefit What It Means For You
✅ Legal Compliance Proves you followed TDS rules for foreign payments. Avoids IT Department scrutiny.
💰 Avoid Penalties Non-filing can attract fines up to ₹1 lakh per event + interest on unpaid TDS.
📁 Clear Audit Trail Transparent cross-border records essential during tax scrutiny or DTAA claim processes.
🏦 Bank Processing Banks won't process foreign remittances without Form 145 acknowledgment number.
🌐 International Credibility Demonstrates best practices to foreign clients/vendors — builds trust.

Key Details Required in Form 145

Filing Form 145 requires a complete set of information for both the remitter (payer) and remittee (recipient). Here's a breakdown:

Category Information Required
Remitter Details Full name, address, TAN, PAN, residential status, email, contact
Remittee (NRI) Details Full name, country of residence, complete address, PAN (if any) or TIN, email
Bank Details IFSC code, bank name, branch, BSR code, authorized dealer details, ITDREIN
Remittance Details Amount (₹ & foreign currency), proposed date, nature of remittance, RBI purpose code & sub-code
TDS Details Amount deducted, TDS rate, date of deduction, Challan Identification Number
Supporting Documents Form 146 (CA certificate), AO order (if Part B), DTAA Tax Residency Certificate, invoices

⚠️ Important: You cannot edit Form 145 once filed. If there is an error, you must withdraw it within 7 days and re-file. Always double-check before submission — CA Sagar Batra's team reviews every detail before filing.

Form 145 vs Form 144 — Key Differences

Feature Form 145 Form 144
Purpose Declaration of foreign remittance + TDS details Application by payee for lower TDS rate
Who Files Remitter (the payer in India) Payee / recipient (NRI)
When Used Before every eligible remittance Before or when TDS is applied
Can Be Edited? No (withdrawal within 7 days only) Upon Assessing Officer's decision
CA Certificate Required for Part C (Form 146) Not required
Bank Processing Acknowledgment mandatory for bank Used as supporting document

Form 145 vs Old Form 15CA — What Changed in 2025?

Aspect Old Form 15CA New Form 145 (2025)
Governing Law Income Tax Act 1961 Income-tax Act 2025
Structure 4 Parts (A, B, C, D) 4 Parts (A, B, C, D) — Enhanced
IT System Integration Limited Real-time analytics & risk assessment
Penalty Provisions Section 271-I Section 462 — Stricter enforcement
CA Certificate Form Form 15CB Form 146
Participant Info Basic Detailed (UDIN, FRN required)

How to File Form 145 — Step-by-Step Process

Online Filing (Recommended)

1
Determine Applicable Part

Identify if your remittance is taxable and whether it exceeds ₹5 lakhs. Decide between Part A, B, C, or D accordingly.

2
Compute TDS & Deduct

Calculate TDS based on applicable rate (considering DTAA provisions). Deduct from payment before transfer.

3
Deposit TDS with Government

Pay deducted TDS via Challan No./ITNS 281 on the authorized online portal. Note the Challan Identification Number.

4
Obtain Form 146 (if Part C)

Engage a Chartered Accountant to issue Form 146 certificate certifying the amount, nature, and correctness of TDS deduction.

5
Login to Income Tax e-Filing Portal

Go to e-File > Income Tax Forms > File Income Tax Forms > Select Form 145.

6
Fill, Validate & Submit

Complete all fields, attach supporting certificates (Form 146, AO certificate, DTAA TRC if applicable), validate, and submit.

7
e-Verify

Verify using DSC (mandatory for TAN users) or EVC. Save the acknowledgment number and confirmation.

8
Submit to Bank

Provide the Form 145 acknowledgment number to your bank. The bank will then process the international remittance.

💡 Pro Tip from CA Sagar Batra:

Keep a dedicated digital folder for each international transaction containing all acknowledgments, challans, Form 146, invoices, and DTAA documents. This is invaluable during IT scrutiny or DTAA credit claims abroad.

Due Dates, Penalties & Compliance

Compliance Item Deadline / Rule
Filing Form 145 Before the remittance — event-based, every eligible payment needs a fresh filing
TDS Deposit By the 7th of the following month after deduction
Quarterly TDS Return Form 27Q filed quarterly as per official IT Department timeline
Error Correction Window Withdraw and re-file within 7 days of original filing
Penalty for Non-Filing Up to ₹1,00,000 per event (Section 462, Income-tax Act 2025)
Bank Processing Block Remittance blocked until valid Form 145 acknowledgment provided

Practical Tips & Common Mistakes to Avoid

✔️
Always verify if your remittance is exempt (LRS, IFSC, specific RBI purpose codes) before filing
✔️
Ensure accurate TIN/PAN of remittee, correct bank BSR codes, and matching RBI purpose codes
👨‍💼
Engage a CA (like CA Sagar Batra's team) for Part C filings or any remittance above ₹5 lakhs
💡
Don't forget to factor in DTAA benefits — many payers overpay TDS by ignoring applicable treaty rates
📁
Keep digital + physical copies of all forms, challans, and acknowledgments for every transaction
🕒
Never file at the last minute — banks may take 1-2 business days to process even after you provide the acknowledgment number
🔄
Check the income tax portal for updated form versions before every filing — especially after budget announcements
🌎
The NRI recipient can use the TDS certificate issued after Form 145 to claim foreign tax credits in their home country

Frequently Asked Questions — Form 145

Do I need a TAN to file Form 145?
Yes, anyone deducting tax at source must have a valid TAN (Tax Deduction and Collection Account Number) — even individuals, if making the payment in a business or professional capacity. Without TAN, TDS cannot be deposited or reported. You can apply for TAN online through the NSDL portal.
Can the non-resident claim the TDS amount back?
Yes. The NRI or foreign recipient can file an income tax return in India to claim a refund if their total Indian tax liability is lower than the TDS deducted. Alternatively, they can claim a foreign tax credit in their home country under the applicable DTAA. The Form 145 TDS certificate is the key document for this process.
Does Form 145 apply to buying goods from abroad?
Generally no — Form 145 specifically targets service fees, royalties, interest, dividends, and technical fees. Purchases of physical goods from overseas usually do not require filing Form 145, but always verify by checking the applicable RBI purpose code for your transaction with a tax expert.
What if I make an error after filing Form 145?
Form 145 cannot be edited after submission. However, you can withdraw it within 7 days of filing and re-file with correct information. If the 7-day window has passed, consult CA Sagar Batra or another qualified tax expert immediately to understand available remedial options and avoid penalties.
What are the latest changes under Income-tax Act 2025?
Form 145 replaces the old Form 15CA under the Income-tax Act 2025. Key changes include: a new form structure with more detailed participant information, mandatory UDIN and FRN for CA certificates, real-time IT backend integration for risk analytics, stricter penalty provisions under Section 462 (up to ₹1 lakh per violation), and the CA certificate is now Form 146 (previously Form 15CB).
Do I need to file for every single transaction?
Yes, Form 145 is event-based — each eligible remittance to a non-resident requires a separate, new submission. There is no annual consolidated filing option. Each filing generates its own unique acknowledgment number which must be provided to the bank before that specific remittance is processed.
How long does the filing process take?
For Part A (under ₹5 lakhs), the online filing itself takes 15-30 minutes if all documents are ready. For Part C (above ₹5 lakhs requiring Form 146), the CA must first issue the certificate, which can take 1-3 business days depending on document availability. CA Sagar Batra's team typically completes Part C filings within 24-48 hours.
SB

CA Sagar Batra

FCA | International Tax Expert

Govt. Authorised CA DTAA Specialist
15+ Years Exp.
12k+ Forms Filed
  • Free initial consultation
  • NRI Tax Advisory
📞 Talk to CA Sagar Batra

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Accurate filing under the Income-tax Act 2025. No errors, no penalties.