Tax dept launches nationwide probe into suspicious foreign remittances

New Delhi: The Income Tax Department has launched a nationwide verification exercise covering nearly 400 entities suspected of making large, potentially unexplained foreign remittances, and is also examining the role of professionals who certified the transactions.

V. Rajitha, commissioner of income tax and official spokesperson of the Central Board of Direct Taxes (CBDT), said in a statement on Tuesday that the department had identified the entities through ground intelligence and analysis of data on outward foreign remittances over the past three years.

“Preliminary verification found that the amounts remitted abroad did not appear to have a clear correlation with the entities' reported turnovers,” the spokesperson said.

The department also found that the stated purposes of some remittances, including payments for freight, import of software and consulting services, did not appear to match the information gathered during ground-level verification. Some of the entities also did not appear to be operating from the addresses they declared.

Verification

The verification exercise comes against the backdrop of the government seeking to tighten the regulatory framework for foreign contributions. The Foreign Contribution (Regulation) Amendment Bill, 2026, introduced in the Lok Sabha in March, was referred to a Joint Parliamentary Committee on 12 August for examination. Among other provisions, the Bill proposes a framework for the supervision, management, and disposal of assets arising from foreign contributions when an organisation's FCRA registration is cancelled, suspended, or expires.

The network came to light during a search operation involving a group of fictitious charitable trusts allegedly engaged in providing accommodation entries against bogus donations or contributions, the CBDT spokespersons said in a statement.

The latest verification exercise, launched on 18 August, covers 394 entities, including 117 entities located in land-border states, as well as 36 professionals who issued certificates for foreign remittances.

The department is examining the entities making the remittances, the persons behind them and the professionals who certified the transactions, it said.

However, clarifying the status of the probe, the official said, “Further investigations are currently underway.”

The department's data analysis also found that a large number of Form 15CB certificates had been issued by a relatively small group of professionals. This has prompted scrutiny of whether adequate due diligence was undertaken before the certificates were issued.

Form 15CB is a certificate issued by a chartered accountant for certain foreign remittances, certifying their taxability, applicable tax rate, and tax deducted at source (TDS) before the payment is made.

As per the Income Tax Department's official norms, the certificate covers details such as the nature of the payment, taxability, TDS rate and deduction.

The tax regime changed from 1 April 2026 with the Income Tax Act, 2025 replacing the Income Tax Act, 1961. Under the new framework, Form 146 is the equivalent of the earlier Form 15CB, while Form 145 corresponds to Form 15CA. As per the Income Tax Department rules, the relevant thresholds have been retained in the Income Tax Rules, 2026, with the provisions set out under Rule 220.

The department's current guidance says Form 146 is required for a taxable payment exceeding ₹5 lakh in a financial year to a person outside India or a foreign company, with a chartered accountant certifying details, including the purpose of the payment and applicable tax deduction.

The CBDT spokesperson further said that accountants issuing Form 15CB/Form 146 are expected to exercise due care, diligence, and professional judgement, and to examine the underlying transactions and relevant facts before certifying remittances.

The verification exercise also covers entities located in districts along India's land borders that have been remitting significant amounts of money abroad.