Foreign Remittances Under Income Tax Scanner: CBDT Launches Nationwide Verification Exercise

The Income Tax Department has launched a nationwide verification exercise into suspicious foreign remittances after data analysis and ground intelligence identified cases where substantial amounts were sent overseas despite little or no reported business activity. The exercise was announced by the Central Board of Direct Taxes (CBDT) on 18 August 2026.

394 Entities and 36 Professionals Under Verification

According to the CBDT, the exercise covers approximately:

• 394 entities involved in foreign remittances;
• 117 entities located in States along India’s land borders; and
• 36 professionals associated with certification of such remittances.

The Department identified entities that had made large outward foreign remittances during the preceding three years while either not filing income-tax returns or reporting very small turnovers. In several cases, the reported turnover had no apparent correlation with the amounts remitted abroad.

Shell Entities and Unusual Transactions in Focus

The verification exercise is focusing on suspected shell entities, persons behind such entities and professionals involved in certifying the remittances.

CBDT also noted cases where the stated purpose of payments—such as freight, software imports or consulting services—did not appear consistent with the entities’ actual activities. Ground-level verification reportedly found that some entities were not operating from their declared addresses.

The investigation originated from a search involving fictitious charitable trusts allegedly providing accommodation entries against bogus donations or contributions, which subsequently revealed a wider network involving outward remittances.

Form 15CB and Form 146 Certifications Under Scrutiny

A significant aspect of the exercise is the role of professionals certifying foreign remittances. CBDT's analysis indicated that a large number of Form 15CB certificates had been issued by a relatively small group of professionals, raising concerns regarding the level of due diligence undertaken before certification.

Under the earlier Income-tax Act, 1961, Form 15CB operated under Section 195(6) read with Rule 37BB. From 1 April 2026, under the Income-tax Act, 2025, Form 146 is the corresponding CA certificate, governed by Section 397(3)(d) and Rule 220 of the Income-tax Rules, 2026. Form 145 similarly replaces the earlier Form 15CA.

CBDT has emphasised that professionals issuing such certificates should exercise due care, diligence and professional judgement.

What Businesses and Professionals Should Do

Businesses making overseas payments should maintain proper agreements, invoices, supporting documents, banking records and evidence establishing the commercial purpose of each remittance. Professionals should independently examine the nature and taxability of the payment and supporting records before issuing the relevant certificate.

Further investigations by the Income Tax Department are underway. Businesses with significant foreign remittances should therefore review their documentation and tax compliance, particularly where the remittance amounts appear disproportionate to reported turnover or business activity.