Form 15CA and 15CB: What to File Before Paying a Foreign Vendor or SaaS Provider from India (Tax Year 2026-27)

A Hyderabad product company renews an annual cloud subscription with a US vendor for about USD 20,000. Accounts asks the bank to release the payment, and the bank asks for "15CA and 15CB". Is the CA certificate really needed, and what else must be done before the money leaves India?

Short answer. From 1 April 2026, Form 15CA is replaced by Form 145 and Form 15CB by Form 146, under Rule 220 of the Income-tax Rules, 2026. A CA's certificate in Form 146 is needed only when the payment is chargeable to tax in India, the total for the tax year exceeds Rs 5 lakh, and no Assessing Officer (AO) certificate has been obtained. Many payments need only a declaration, and some need no form at all.

Which law applies to which period

The Income-tax Act, 2025 replaced the Income-tax Act, 1961 from 1 April 2026, and "tax year" replaces "assessment year". For remittances on or after that date the relevant provisions are:

Subject	Income-tax Act, 1961 and Rules, 1962	Income-tax Act, 2025 and Rules, 2026
TDS on sums paid to non-residents	Section 195	Section 393(2), Table Sl. No. 17
Reporting of remittance	Rule 37BB; Form 15CA	Rule 220; Form 145
Accountant's certificate	Form 15CB	Form 146
Order/certificate of AO	Section 195(2)/(3)	Section 395
Penalty for non-furnishing or wrong information	Section 271-I	Section 462
Penalty on accountant for inaccurate certificate	Section 271J	Section 463

The Income Tax Department's own pages for Forms 145 and 146 state this mapping. Remittances made up to 31 March 2026 stay under the old forms and rules; this guide covers 2026-27 onwards. Many bank forms and vendor emails still say "15CA/15CB", so expect both labels in practice. The section corresponding to old section 195(6) is section 397 (sub-section reference to confirm).

Step 1: Decide whether the payment is chargeable to tax in India

Form 145 asks first whether the sum paid to a non-resident is "chargeable to tax". That is a legal conclusion, not an accounting one. A payment is taxable in India only if the Act brings it within India's reach, and a Double Taxation Avoidance Agreement (DTAA) with the vendor's country of residence may override it. Typical questions:

• Is the payment for goods (a pure import) or for services, software or licensing?
• Does the vendor have a permanent establishment in India?
• If a software or SaaS payment, is it royalty, fees for technical services (FTS), or business income not taxable absent a permanent establishment under the treaty?
• Does the vendor hold a Tax Residency Certificate (TRC) and give the prescribed treaty-claim form (Form 41, the Rules 2026 counterpart of Form 10F; confirm)?

The characterisation of cross-border software and cloud payments has been litigated for years and depends on the contract, the treaty and the facts. Treat any blanket rule that "SaaS is never taxable" or "always royalty" as unsafe.

Step 2: Choose the correct part of Form 145

Form 145 is filed on the e-filing portal, once per remittance, before the payment is made.

Part	When it applies	CA certificate (Form 146)?
A	Chargeable to tax; remittance, or aggregate of remittances, in the tax year up to Rs 5 lakh	No
B	Chargeable; above Rs 5 lakh; AO order or certificate under section 395 obtained	No
C	Chargeable; above Rs 5 lakh; no AO certificate; Form 146 obtained	Yes
D	Not chargeable to tax (and not within the exempt list below)	No

Whether the Rs 5 lakh aggregate is counted per remittee or across all remittees is a point to confirm on the portal instructions before filing.

Remittances needing no Form 145

Rule 220(3) exempts a non-chargeable remittance from reporting in three cases, per the rule text as published by secondary sources (the official rule page could not be opened; confirm against the Gazette): (a) an individual's remittance that needs no prior RBI approval, such as under the Liberalised Remittance Scheme (LRS); (b) a remittance by a unit of an International Financial Services Centre (IFSC); and (c) a remittance falling under one of the 33 RBI purpose codes listed in the rule, which include import payments, travel, education, family maintenance and similar items. A taxable payment is never exempt on this ground; the exemption is only for sums that are not chargeable.

Step 3: When a CA certificate in Form 146 is required

Only for Part C. The remitter assigns a chartered accountant on the e-filing portal; the CA registers a digital signature certificate (DSC), completes Form 146, and quotes an ICAI UDIN (Unique Document Identification Number). The remitter then enters the Form 146 acknowledgement number in Form 145 Part C, which prefills the CA details.

In Form 146 the accountant certifies, on the documents produced, the taxability under sections 5 and 9 of the Act (as named in the form), any treaty relief claimed, the TDS rate and the TDS particulars. The documents typically include the invoice or agreement, the vendor's TRC and Form 41, and, for business income, a no-permanent-establishment declaration. Each Form 146 can be used for only one Form 145 Part C. Both forms can be withdrawn within seven days of submission but cannot be edited.

Step 4: Deduct and deposit TDS

Forms 145 and 146 report; they do not substitute for TDS. Where the sum is chargeable, the payer must deduct tax under section 393(2), Table Sl. No. 17, at the rate in force or the lower treaty rate, and deposit it with the Government. Points to check:

1. Tax is deducted at the time of credit or payment, whichever is earlier (rule carried over; confirm under the 2025 Act).
2. The payer needs a TAN (Tax Deduction Account Number), and the quarterly TDS return for non-residents is now filed in Form 144 (confirm).
3. If the contract says the vendor receives an amount "net of Indian taxes", the tax is grossed up under section 393(10), as mentioned in Form 146.
4. Lower or nil deduction needs an AO certificate under section 395 and cannot be assumed.

The rate chart is in our TDS rates under section 393 note, and the exposure for non-deduction is in consequences of TDS default.

Worked example (illustrative; assumptions are not tax advice)

Assume an Indian company pays a foreign software vendor USD 20,000 for a year at an assumed rate of Rs 85 per USD, so Rs 17,00,000. Assume no other payments to that vendor this tax year.

Scenario	Conclusion on chargeability	Form route	TDS
1. Treaty and facts support a view that the sum is not taxable in India	Not chargeable	Form 145 Part D; no Form 146	Nil, but the basis must be documented
2. Sum treated as royalty, assumed treaty rate 10% (illustrative only, not any specific treaty)	Chargeable; above Rs 5 lakh	Part C with Form 146 (or Part B if an AO certificate is held)	Rs 1,70,000 before any surcharge and cess; vendor receives Rs 15,30,000 if tax is borne by the vendor
3. Same as 2 but contract is net of tax	Chargeable	Part C	Tax grossed up under section 393(10), increasing the payer's cost

The example shows the sequence: chargeability first, then the form, then TDS.

FEMA and the authorised dealer bank

Separately, the Foreign Exchange Management Act, 1999 (FEMA) governs the remittance. Payments for services are current account transactions governed by the Foreign Exchange Management (Current Account Transactions) Rules, 2000, and are made through an authorised dealer (AD) bank. Under RBI's Master Direction on Other Remittance Facilities, the AD obtains Form A2 for all cross-border remittances, regardless of value, and a declaration and information that reasonably satisfy it that the transaction does not contravene FEMA. RBI does not prescribe which documents the AD verifies; each bank follows its Board-approved policy, which is why document requests differ between banks.

The AD also records an RBI purpose code. Common codes for software and business services are S0802 (software consultancy or implementation), S0807 (software imports), S0902 (royalties and licence fees), S1006 (business and management consultancy) and S1007 (advertising), per a secondary compilation of the RBI list (confirm against the bank's current list). The RBI list has no dedicated SaaS code, so the code reported should match the bank's reading of the contract and must be consistent with Form 145 and the invoice. Under Rule 220, the AD files a quarterly statement (Form 147) with the tax department.

Equalisation levy: current position

The 6% equalisation levy on online advertisement services was abolished by the Finance Act, 2025 with effect from 1 April 2025, and the 2% levy on e-commerce supply was withdrawn earlier, from 1 August 2024 (both per secondary reports; confirm the Finance Act section references and savings for earlier periods). Payments for tax year 2026-27 therefore do not attract an equalisation levy. The abolition does not itself change the section 393 TDS analysis, which turns on chargeability and treaty position.

GST reverse charge on imported services

Goods and Services Tax (GST) is separate. Where an Indian business receives services from a supplier outside India, integrated GST is generally payable by the recipient under reverse charge (RCM) under section 5(3) of the IGST Act, 2017 and the related rate notification (confirm current notification number), and input tax credit is subject to sections 16 and 17(5) of the CGST Act. Form 145/146 compliance does not discharge this. See GST reverse charge for the general RCM discussion.

Common mistakes

• Treating "no Form 15CB needed" as "no tax needed"; TDS and Form 145 are separate duties.
• Filing Form 145 after the bank has released the payment; it is required before remittance.
• Mismatch between the Form 145 purpose code, invoice description and Form A2.
• Splitting a payment across invoices to stay under Rs 5 lakh; the test is the aggregate for the tax year.
• Missing TRC or Form 41, which can deny the treaty rate.
• Ignoring grossing-up when the contract is net of tax.

Hyderabad context

Teams in Gachibowli, Hitech City and Nanakramguda routinely pay overseas for cloud, developer tools, advertising and group-company services. Payments to a related foreign group entity also raise transfer-pricing and related-party questions; see FEMA reporting for foreign investment for the capital-side reporting. Because the AD bank is where documents are checked, inbound-side readers may also compare export-side forms.

FAQs

Is Form 15CB still required in 2026-27? The CA certificate now takes the form of Form 146, and only when Form 145 Part C applies.

Do I need Form 145 for a payment below Rs 5 lakh? If the sum is chargeable, Part A applies; if it is not chargeable and not in the exempt list, Part D. Exempt-list payments need no form.

Who signs Form 146? A chartered accountant registered on the e-filing portal with a DSC, assigned by the remitter, with a UDIN.

Does equalisation levy apply to SaaS subscriptions now? Not on the basis of the 2024 and 2025 abolitions noted above (confirm); TDS and GST analyses still apply.

What is the penalty for not furnishing Form 145 or giving wrong information? Up to Rs 1 lakh under section 462, and up to Rs 10,000 per certificate for an accountant under section 463, per the department's form pages.

Conclusion

The sequence is stable even though the form numbers changed: establish chargeability and treaty position, pick the right part of Form 145, obtain Form 146 only for Part C, deduct and deposit TDS where chargeable, then satisfy the AD bank under FEMA and the GST reverse-charge position separately. Verify thresholds and forms on the portal at the time of each remittance.

Educational purpose only; this article is not professional advice and does not create a professional relationship. Law and forms may change.

Arpan Bohra & Co., Chartered Accountants – https://www.arpanbohra.co.in/ – ab@arpanbohra.co.in

Sources

• Form 145, Form 145 FAQs, Form 146 and Form 145 user manual, Income Tax Department.
• RBI Master Direction, Other Remittance Facilities.