Foreign Remittances Under IT Scanner: CBDT Launches Nationwide Verification Exercise

The Income Tax Department has launched a nationwide verification exercise into suspicious foreign remittances, focusing on entities with significant overseas transfers despite low or no reported business activity. The exercise also examines the role of professionals involved in certifying such remittances.

394 Entities and 36 Professionals Under Verification

As per the CBDT Press Release dated 18 August 2026, the verification exercise covers approximately 394 entities, including 117 entities located in States along India's land borders, and 36 professionals.

The exercise is focused on:

• Shell entities and the persons behind them;

• Entities making substantial foreign remittances despite reporting little or no business activity;

• Transactions where reported turnover appeared disproportionate to the amounts remitted overseas; and

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• Professionals who issued certificates relating to foreign remittances.

The Department stated that its analysis covered outward foreign remittances made over the preceding three years and was supported by ground-level intelligence.

Why Are These Foreign Remittances Being Examined?

The Department found cases where entities were either non-filers or reported very small turnover in their income-tax returns, while simultaneously making substantial foreign remittances.

In some cases, the reported turnover had no apparent correlation with the amounts remitted abroad. The stated purposes of the remittances, including payments for freight, software imports and consulting services, also appeared inconsistent with the entities' financial profiles.

Ground-level verification further indicated that some entities were not operating from their declared addresses.

The investigation follows the discovery of a network of entities during a search involving fictitious charitable trusts allegedly engaged in providing accommodation entries against bogus donations or contributions. The Department is examining the entities involved, the persons behind them and the underlying transactions.

Form 15CB and Form 146 Under Scrutiny

A significant aspect of the exercise concerns professional certification.

The CBDT stated that data analysis showed a large number of Form 15CB certificates had been issued by a relatively small group of professionals, while the remitted funds were received by a clustered group of entities.

Under Form 15CB read with Rule 37BB of the Income-tax Rules, 1962, the accountant certifying a foreign remittance is required to verify its taxability with reference to the books of account and relevant documents. The corresponding framework under the Income-tax Rules, 2026 uses Form 146 read with Rule 220.

The CBDT has therefore emphasised that accountants issuing Form 15CB/Form 146 should exercise:

• Due care;

• Diligence; and

• Professional judgment.

The underlying transaction and relevant facts should be properly examined before certification.

What Should Businesses Do?

Businesses making genuine foreign payments should not be concerned merely because the payment is made overseas. However, they should maintain adequate documentation supporting the transaction.

Businesses should ensure that:

• The commercial purpose of the payment is clearly established;

• Agreements, invoices and supporting documents are properly maintained;

• The accounting records agree with the remittance and bank records;

• The nature and taxability of the payment are properly examined; and

• Information provided for foreign-remittance certification is complete and accurate.

A significant difference between reported business activity and foreign remittances may attract questions from the tax authorities, even though such a difference by itself does not establish any wrongdoing.

Key Takeaway for Taxpayers and Professionals

The CBDT's latest exercise demonstrates the increasing use of data analysis and ground intelligence to identify unusual cross-border transactions.

For taxpayers, the key message is to maintain a clear documentary trail and ensure consistency between the business activity, books of account, tax returns and foreign remittances.

For professionals, the exercise reinforces the importance of exercising appropriate professional judgment and diligence before issuing Form 15CB or Form 146 certifications.

The CBDT has clarified that further investigations are currently underway.

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 under scrutiny.

SEO_TITLE: Foreign Remittances Under Income Tax Scanner

SEO_DESCRIPTION: CBDT is scrutinising suspicious foreign remittances and Form 15CB/Form 146 certifications. Learn the key compliance points and act now.