Form No 146: Detailed Guide for Certificate of Accountant in India

Introduction to Form No 146

Form No 146 is a newly introduced Chartered Accountant certificate for foreign remittances made to non-residents or foreign companies under the updated provisions of the Income Tax Act, 2025. It replaces the earlier Form 15CB under the revised income tax framework and applies from the financial year 2026-27, beginning April 1, 2026. The form is applicable when such payments are taxable in India and plays an important role in maintaining transparency, accuracy, and compliance with statutory requirements for businesses and individuals.

The form is specifically used to certify the taxability of payments made to non-residents and ensure the appropriate deduction of tax at source (TDS). It contains details concerning the remitter, remittee, remittance amount, and taxability under the Income Tax Act and Double Taxation Avoidance Agreement (DTAA) provisions. Correct and timely filing of the form is necessary to avoid penalties or legal complications, making it an important part of corporate governance and regulatory compliance. It must be filed before the remittance is made.

Legal Framework and Governing Authority

Form 146 is governed by the Income Tax Act, 2025, along with the Income Tax Rules, 2026. Previously, similar provisions were covered under the Income Tax Act, 1961, particularly Sections 195 and 271J. These provisions have now been aligned with Sections 393 and 463 under the Income Tax Act, 2025. The form is mainly governed by Section 393 of the Income Tax Act, 2025, which relates to foreign remittances, and Section 463, which deals with penalties for incorrect certification. Rule 220 of the Income Tax Rules, 2026, earlier Rule 37BB, sets out the procedural requirements for reporting foreign remittances.

The Income Tax Department functions under the Central Board of Direct Taxes and is responsible for administering, regulating, and updating the compliance requirements associated with this form. From a compliance standpoint, Form 146 ensures that payments made to non-residents are properly reviewed for taxability, including the applicability of DTAA provisions. This framework supports transparency, accurate reporting, and compliance with Indian tax laws for cross-border transactions.

Key Changes in Form No 146

Form No 146 brings several significant changes compared with the earlier Form 15CB framework:

1. Mandatory TIN: Tax Identification Number (TIN) is required when the remittee does not have a PAN, particularly when claiming DTAA benefits.
2. UDIN Requirement: A Unique Document Identification Number (UDIN) has been introduced to authenticate the certificate issued by the Chartered Accountant.
3. Additional CA Details: The Chartered Accountant’s PAN and Firm Registration Number (FRN) are now required for improved verification.
4. Enhanced Capital Gains Reporting: The form now captures additional information, including the date of acquisition, date of transfer, and calculation of capital gains.
5. Improved Form Structure: The fields have been reorganized to provide greater clarity and enable system-based filing.

Who Needs to File Form No 146?

Form 146 applies to specific situations involving foreign remittances where filing of the form is required:

1. Form 146 is required when a person (remitter) makes a payment to a non-resident or foreign company.
2. It applies when the payment is taxable in India and exceeds Rs 5 lakh during a tax year.
3. The form is required when no certificate has been obtained from the Assessing Officer under Section 395(1) or 395(2) of the Income Tax Act, 2025.
4. The Chartered Accountant submits the form after the remitter assigns Form No. 145 Part C through the e-Filing portal.

Purpose of Certificate of Accountant

1. The certificate confirms that the financial information provided by the taxpayer is accurate and consistent with the records and books of accounts.
2. It certifies that the taxpayer has followed the applicable provisions of the Income Tax Act, 2025, including Sections 5 and 9 concerning income chargeability, along with the relevant rules.
3. The accountant verifies claims made by the taxpayer, including deductions, exemptions, or specified transactions, helping reduce the possibility of incorrect reporting.
4. It serves as supporting documentation for the Income Tax Department when examining applications, declarations, or filings.
5. Expert verification helps reduce errors, misreporting, and possible tax disputes.
6. Several tax-related approvals or registrations depend on certified information, and the certificate helps facilitate processing by providing verified details.
7. It creates accountability for both the taxpayer and the certifying accountant, supporting transparency in financial disclosures.
8. It certifies the taxability of foreign remittances under Sections 5 and 9 of the Income Tax Act, along with the applicable provisions of Section 393 and DTAA.

Key Details Required in Form No 146

Knowing the important information required in Form 146 is necessary for accurate filing and smooth processing of foreign remittance transactions. The form records comprehensive details about the remitter, remittee, and nature of the payment to ensure appropriate tax compliance.

Remitter details include name, address, PAN, TAN, and residential status.

1. Remittee details, including name, address, country of residence, PAN (where applicable), or Tax Identification Number (TIN) when PAN is unavailable.
2. Remittance details covering the country of transfer, currency, amount payable, proposed remittance date, and RBI purpose code.
3. Bank and authorized dealer information, including IFSC code and other relevant banking details.
4. Taxability under the Income Tax Act without DTAA, including the applicable section, nature of income, and tax liability.
5. DTAA applicability, including the Tax Residency Certificate (TRC) and relevant treaty article where relief is claimed.
6. Nature of payment, such as royalty, technical fees, interest, dividend, or capital gains.
7. TDS details, including the applicable rate, amount deducted, and date of deduction.
8. Grossing-up details wherever required under the tax provisions.
9. Verification by the Chartered Accountant, including membership number, firm registration number (FRN), and Unique Document Identification Number (UDIN).
10. The remittee’s Tax Identification Number (TIN) is mandatory when PAN is unavailable, particularly for claiming DTAA benefits.

Role of a Chartered Accountant in Form No 146

Understanding the role of a Chartered Accountant in Form 146 is important, as the CA-certified document ensures accurate information, compliance, and proper verification of financial details.

1. The CA examines books of accounts, financial statements, and supporting documents to verify the accuracy of the information provided.
2. They confirm that the information stated in the form is true and fairly presented based on the records and applicable provisions of the Income-Tax Act, 2025.
3. The CA ensures that the taxpayer has properly complied with all relevant tax provisions, rules, and guidelines.
4. The CA is responsible for certifying the taxability of the foreign remittance under the applicable provisions before the payment is made.
5. Claims relating to deductions, exemptions, or specific transactions are reviewed and validated before certification.
6. Chartered Accountants may assist with preparing Form No. 146 and can also file it on behalf of the taxpayer with the Income Tax Department.
7. By signing the certificate, the CA assumes professional responsibility for the accuracy of the information, thereby enhancing its credibility.
8. They advise taxpayers on appropriate documentation, compliance requirements, and ways to avoid errors or penalties.
9. The involvement of a CA promotes transparency and helps reduce the possibility of misreporting or legal disputes.

Consequences of Incorrect Filing

Incorrect filing of Form 146 and non-compliance can result in several consequences, including:

1. Providing inaccurate information in Form No. 146 may result in a penalty of up to Rs 10000 per certificate under Section 463 of the Income Tax Act, 2025.
2. Incorrect determination of taxability may result in short deduction of TDS and additional tax liability.
3. Non-compliance may lead to scrutiny or notices from the Income Tax Department.
4. Delayed filing may create compliance issues during the processing of foreign remittances.

Withdrawal of Form No 146

Form No 146 can be withdrawn within 7 days from the date of submission. This allows the Chartered Accountant or remitter to rectify errors or reconsider the filing when necessary. Once this period has passed, the form cannot be withdrawn, and corrections may require fresh compliance procedures.

Common Mistakes to Avoid While Filing

Knowing the common filing mistakes can help prevent delays, rejection, and compliance-related issues.

1. Entering an incorrect PAN of the assessee or remittee may result in rejection or delays in processing.
2. Leaving mandatory fields incomplete in any panel may prevent successful submission of the form.
3. Mismatches between the information in the form and supporting documents, such as invoices or bank records, may trigger scrutiny.
4. Incorrect calculation of taxability under the Income Tax Act, 2025, or incorrect application of DTAA provisions may result in errors.
5. Failing to claim eligible DTAA benefits or claiming them without proper documents such as TRC can create compliance issues.
6. Mistakes in reporting Tax Deducted at Source (TDS), including incorrect amounts or challan details, may create discrepancies.
7. Incorrectly adding or assigning the Chartered Accountant on the portal may delay the filing process.
8. Skipping the preview option to verify the information can result in avoidable errors.
9. Failing to complete the Digital Signature Certificate (DSC) verification process will leave the filing incomplete.
10. Forgetting to validate the UDIN after submission may affect the authenticity of the certificate.
11. Missing the applicable deadlines may result in penalties or compliance complications.
12. Not following the latest instructions or updated form structure may lead to rejection.
13. Failing to check the Rs 5 lakh applicability threshold.
14. Filing the form after the remittance instead of before the remittance.

Due Dates for Form No 146

Understanding the due date for Form 146 is essential for maintaining compliance.

1. Form No 146 does not have a specific statutory due date prescribed under the income tax rules.
2. It must be filed before the remittance is made to the non-resident or foreign company.
3. The form is event-based, meaning it is required for every individual remittance that meets the applicable conditions.
4. Filing the form in advance ensures that the Tax Deducted at Source (TDS) is properly determined and applied.
5. Filing after the remittance may result in non-compliance issues, scrutiny, or penalties.

Conclusion

Form No 146 is an important compliance requirement for foreign remittance transactions, ensuring that payments made to non-residents or foreign companies are appropriately examined for taxability under Indian law. Certified by a Chartered Accountant, the form helps determine the correct TDS liability while taking applicable provisions and DTAA benefits into account.

Since the form is event-based, timely filing before making the remittance is essential to avoid compliance issues and penalties. By maintaining accurate documentation and following the prescribed procedures, taxpayers can support smooth cross-border transactions, transparency, and compliance with Indian income tax regulations.

FAQs – Form No. 146: Certificate of Accountant in India

1. What is Form No. 146 under the Income Tax Act?
   Form No. 146 is a certificate issued by an accountant for specified tax-related purposes. It provides certification of relevant financial and tax information as required under the applicable provisions.
2. Who is required to submit Form No. 146?
   Form No. 146 may be required by taxpayers who fall under the provisions where an accountant’s certificate is prescribed. Its applicability depends on the nature of the transaction and the relevant tax requirements.
3. Who can issue Form No. 146?
   The form is generally required to be certified by a qualified accountant who is authorized to issue the prescribed certificate under the applicable income tax provisions.
4. What information is included in Form No. 146?
   The form generally contains details relating to the taxpayer, relevant income or transaction, tax information, and the accountant’s certification.
5. Why is Form No. 146 required?
   The certificate helps establish that the information provided by the taxpayer has been examined and certified by an eligible accountant for the prescribed tax purpose.
6. Is Form No. 146 applicable to individuals?
   Its applicability depends on the specific transaction and statutory requirement. Individuals may need the form when they fall within the relevant provisions.
7. Is Form No. 146 applicable to companies?
   Companies may also be required to obtain an accountant’s certificate where the applicable tax provisions prescribe Form No. 146.
8. What documents are required for Form No. 146?
   The required documents depend on the purpose of the certificate. Financial statements, tax records, transaction documents, and supporting evidence may be required for verification.
9. Can Form No. 146 be filed online?
   Where electronic submission is prescribed, the certificate may need to be submitted through the income tax e-filing system. The applicable procedure should be checked for the relevant assessment year.
10. Is Form No. 146 required every year?
    Not necessarily. The requirement generally depends on whether the taxpayer or transaction falls within the relevant statutory provisions for that particular year.
11. What is the role of an accountant in Form No. 146?
    The accountant verifies the relevant information and provides the required certification. The accountant may rely on supporting documents and records provided by the taxpayer.
12. Can a Chartered Accountant issue Form No. 146?
    A Chartered Accountant who meets the prescribed eligibility requirements may issue the certificate where the relevant law authorizes or requires a CA’s certification.
13. What happens if incorrect information is provided in Form No. 146?
    Incorrect information can lead to compliance issues and may affect the taxpayer’s tax position. Supporting documents should therefore be reviewed carefully before certification.
14. What documents should be maintained after obtaining Form No. 146?
    Taxpayers should retain the certificate along with financial records, supporting documents, tax statements, and other evidence used to prepare the certificate.
15. Is Form No. 146 different from other accountant certificates?
    Yes. Different accountant certificates are prescribed for different tax purposes. The specific form and certification requirements depend on the relevant provision of law.
16. Can Form No. 146 be revised after submission?
    Whether a revised certificate can be submitted depends on the applicable rules and the nature of the error. The taxpayer should consult the certifying accountant before making any correction.
17. What is the due date for Form No. 146?
    The due date depends on the purpose for which the certificate is required and the applicable statutory provision. Taxpayers should verify the deadline applicable to their specific case.
18. What are the consequences of not submitting Form No. 146 when required?
    Failure to provide a prescribed certificate may result in non-compliance and could affect the taxpayer’s ability to claim a benefit or complete the relevant tax procedure.
19. How can a taxpayer prepare for Form No. 146 certification?
    The taxpayer should organize relevant financial statements, transaction records, tax documents, and other supporting evidence before approaching the accountant for certification.
20. Why should you take professional assistance for Form No. 146?
    Form No. 146 may involve detailed verification of financial and tax information. Professional assistance can help ensure that the certificate is prepared accurately and the applicable compliance requirements are followed.