Foreign Remittances Under IT Scanner: CBDT Launches Nationwide Verification Exercise

The Income Tax Department has launched a nationwide verification exercise into suspicious foreign remittances, covering approximately 394 entities and 36 professionals. The exercise focuses on entities with unusually large overseas remittances compared with their reported business activity and on professionals involved in foreign-remittance certifications.

Why Has the Income Tax Department Started This Exercise?

As per the CBDT Press Release dated 18 August 2026, the Department identified suspicious foreign remittance patterns through analysis of outward remittance data and ground intelligence.

The investigation follows the discovery of a network of entities during a search involving fictitious charitable trusts allegedly providing accommodation entries against bogus donations or contributions.

Preliminary verification reportedly identified entities that:

• Were non-filers or reported very small turnovers in their income-tax returns.

• Remitted substantial amounts of foreign exchange over the preceding three years.

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• Had reported turnover that did not appear proportionate to the amounts remitted abroad.

• Reported purposes such as freight payments, software imports or consulting services that did not appear consistent with their business activity.

• Were, in some cases, not operating from their declared addresses.

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394 Entities and 36 Professionals Under Verification

The nationwide exercise covers approximately 394 entities, including 117 entities located in States along India's land borders, along with 36 professionals.

The Department is examining:

• Shell or suspicious entities;

• Persons behind such entities;

• The underlying foreign remittance transactions; and

• Professionals who issued foreign-remittance certificates.

Further investigation is currently underway, and the exercise should not be interpreted as a final finding against every entity or professional covered.

Form 15CB and Form 146 Under Scrutiny

A significant aspect of the exercise concerns foreign-remittance certifications.

For remittances governed by the Income-tax Act, 2025, Form 146 is the new equivalent of the earlier Form 15CB. The Income Tax Department states that Form 146 is required for taxable payments to a non-resident or foreign company where the payment or aggregate payments exceed ₹5 lakh during the tax year, subject to the applicable framework.

The Department has noted that a large number of Form 15CB certificates were issued by a relatively small group of professionals and has raised concerns about whether adequate due diligence was undertaken.

The CBDT has specifically emphasised that professionals issuing Form 15CB/Form 146 should exercise due care, diligence and professional judgment and properly examine the underlying transaction and relevant facts before certification.

What Should Businesses Do?

Businesses making genuine foreign payments should ensure that the transaction is properly documented and commercially explainable.

Important records may include:

• Agreements, purchase orders and invoices;

• Details of the services or goods received;

• Proof of delivery or performance, wherever applicable;

• Accounting records and bank statements;

• Taxability and withholding-tax analysis;

• Relevant DTAA documentation, where applicable; and

• Form 145/Form 146 records under the new framework.

The Income Tax Department's current portal confirms that Form 145 replaces Form 15CA and Form 146 replaces Form 15CB for remittances under the Income-tax Act, 2025.

Key Takeaway

The latest CBDT action highlights the increasing importance of consistency between a taxpayer's books, tax returns, banking transactions, business activity and foreign remittances.

Genuine foreign transactions should not be a cause for concern merely because they are being made overseas. However, businesses should maintain a clear documentary trail and professionals should undertake appropriate verification before issuing certifications.

For expert guidance on this topic, contact your tax professional today.

EXCERPT: CBDT is verifying suspicious foreign remittances involving 394 entities and 36 professionals, with Form 15CB/Form 146 certifications also under scrutiny.

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