Form 145 Purpose-Code Mapping for Foreign Remittances: Bank and Tax-Team Control File
By Ravi Sisodia · Reviewed by CA Divyanshu Sengar · Updated 5 October 2026
Form 145 uses a structured remittance-purpose selection. The purpose code should describe the actual payment and align with contract, invoice, bank instruction, withholding analysis and regulatory remittance classification.
Finin2min 2-Minute Summary
- The Department's Form 145 guidance says the new form asks for remittance purpose from a fixed list.
- Purpose selection is not cosmetic: it should agree with the economic transaction and tax analysis.
- Finance should maintain a controlled mapping for recurring remittances rather than let each preparer guess.
- Mixed-purpose invoices may need transaction splitting or documented judgement.
- Bank/RBI-purpose terminology and income-tax-purpose fields should be reconciled rather than assumed identical.
Build a purpose-code catalogue
For common transactions such as software, technical service, royalty, commission, interest, dividend, import/service cost or reimbursement, record the tax character, Form 145 purpose selection, bank/RBI description, typical withholding analysis and required documents.
Version the catalogue because forms or code lists can change.
Map from contract to code
Read the actual service/goods/IP/financing clause and invoice. A vendor's invoice label such as 'consulting' should not override the legal substance if the contract is for licence/royalty or bundled services.
Where one invoice contains multiple elements, document whether they are separable for tax and remittance reporting.
Exception governance
New or unusual purpose codes should be reviewed by tax/treasury before payment. Keep the reason for selection and any bank clarification so subsequent identical payments can be processed consistently.
Do not change the code merely to get a bank transaction through faster.
Purpose-code case: bundled software licence plus support
A foreign invoice includes a software licence and one year of technical support. One remittance purpose code may not accurately describe both components if their tax character differs. Review the contract allocation, withholding analysis and bank purpose categories; if the components are separable, the remittance/reporting structure should reflect that rather than hide both under a generic 'services' label.
Where the bank and tax form use different code systems, maintain a cross-reference table showing why the selected codes describe the same commercial payment.
- Analyse bundled payments by component.
- Maintain bank-to-tax purpose crosswalk.
- Do not choose a generic code only to simplify processing.
Purpose mapping checklist
- Contract/invoice description.
- Economic substance.
- Form 145 purpose list.
- Withholding/DTAA position.
- Bank/RBI purpose alignment.
- Mixed-payment analysis.
- Mapping approval/version.
Questions readers commonly ask
Does Form 145 have a purpose list?
Yes, the Department describes a fixed-list purpose selection.
Can the bank choose a different purpose from tax?
Any difference should be understood and reconciled, not ignored.
Should recurring vendor payments reuse a mapping?
Yes, if the facts remain the same and the mapping is current.
What if the invoice contains two services?
Assess whether separate purpose/tax treatment is needed.
Official / primary sources
- Income Tax Department - Form 145 - Purpose-selection and filing structure
- Income Tax Forms FAQ - Rule 220 and form transition
Disclaimer
Important: General educational and professional-reference material. Verify the current operative law, commencement notification, portal version and exact facts before acting. Educational and professional reference only; confirm the current law, rates and the facts of your case before relying on this page.