The transition to the Income-tax Act, 2025 (ITA 2025) and the accompanying Income-tax Rules, 2026 introduces a significantly overhauled compliance framework for foreign remittances and treaty benefit claims. The familiar forms—10F, 15CA, and 15CB—have been succeeded by Forms 41, 145, and 146 respectively. This rewrite outlines the key structural shifts, enhanced disclosure requirements, and a critical interpretational issue regarding treaty eligibility.
1. Form 41: Mandatory Treaty Declaration (Successor to Form 10F)
The most fundamental shift concerns the claiming of Double Taxation Avoidance Agreement (DTAA) benefits. Previously, under Section 90(4) of the 1961 Act, Form 10F was largely a gap-filling document required only if specific particulars were missing from the Tax Residency Certificate (TRC).
Under the new regime, Section 159(8) read with Rule 75 mandates that Form 41 must be furnished in all cases where treaty relief is claimed, regardless of the TRC's contents. Key changes include:
Electronic Filing: Form 41 is strictly electronic and cannot be edited post-submission.
Expanded Data: It now requires email, contact number, and Indian communication address.
PAN Preference: PAN is required where available, with no Aadhaar alternative for individuals.
Annual Filing: The form must be filed once per tax year for the non-resident seeking relief.
Form 41 operates as a comprehensive declaration rather than a supplementary document, requiring verification that the filer is competent and that no facts have been concealed.
2. Form 146: Enhanced Accountant Certification (Successor to Form 15CB)
Form 146 represents a substantial expansion of the accountant's reporting obligations, moving from a basic certificate to a detailed analytical report. The form comprises seven panels demanding granular data.
Notable enhancements include:
Remitter Details: Comprehensive information is now required, including PAN, TAN, address, and contact details.
Remittee Information: Requires PAN (if available), Tax Identification Number (TIN), and principal place of business.
Standardized Classification: Remittances must be categorized using a structured list of 65 descriptions aligned with RBI purpose codes and sub-codes.
Detailed Taxability Analysis: Accountants must provide a reasoned analysis of taxability under the Act (without treaty) and under the applicable DTAA. Character limits for reasoning have been expanded to 2,000 characters.
Capital Gains Reporting: Transaction-level details—including acquisition date, sale consideration, and cost of acquisition—are now mandatory for capital gains remittances.
Professional Traceability: The accountant must disclose PAN, membership registration date, and UDIN within the form.
3. Form 145: Aligned Remitter Declaration (Successor to Form 15CA)
Form 145 retains the four-part structure of its predecessor but is now closely aligned with Form 146 to ensure data consistency and facilitate tax authority cross-verification.
Key updates include:
PAN/TAN Requirement: PAN is mandatory for the remitter; Aadhaar is not an alternative.
Remittance Classification: Like Form 146, the nature of remittance must be selected from the standardized 65-category list, with mandatory reporting of RBI purpose codes.
UDIN Integration: In Part C filings (where an accountant certificate is required), quoting the UDIN from Form 146 is mandatory.
Optional Traceability: The form allows for the optional reporting of the Authorised Dealer's ITDREIN for improved tracking.
4. Critical Issue: Treaty Benefits and Double Non-Taxation
Beyond procedural changes, the new legislation introduces substantive uncertainty regarding treaty eligibility in scenarios of double non-taxation (where income is not taxed in the source state or the residence state). Section 159(1) explicitly states that treaties aim to avoid double taxation "without creating opportunities for non-taxation."
Furthermore, Rule 75(1) states Form 41 is for claiming "double taxation relief." This language, combined with the Supreme Court's decision in Tiger Global International II Holdings (2026)—which held that an assessee must prove taxability in the residence state to invoke a treaty—raises concerns that the principle has been codified.
Analysis:
While the portal guidance suggests Form 41 applies only when income is taxed in both countries, an alternative view exists. The word "any" in Rule 75(1) suggests a broad scope, and the phrase "double taxation relief" may be descriptive of the statutory chapter heading rather than a restrictive condition. Limiting treaty access strictly to double-taxation scenarios could reignite the "liable to tax" versus "subject to tax" debate.
Conclusion
The new regime under ITA 2025 demands a higher degree of diligence and upfront data accuracy from both remitters and certifying accountants. Compliance processes must be recalibrated to accommodate the expanded data fields in Forms 145 and 146. Concurrently, taxpayers relying on treaty benefits in structures that result in low or nil taxation in the residence state must conduct a careful, treaty-specific analysis pending further clarity on how the tax authority will interpret the anti-non-taxation provisions in light of Tiger Global.
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