Income Tax Department Launches Nationwide Verification of Suspicious Foreign Remittances
By Sanchita Banerjee | IBG NEWS
New Delhi, August 18, 2026: The Income Tax Department has initiated a nationwide verification exercise targeting suspicious outward foreign remittances, following data analysis and ground-level intelligence that identified entities sending substantial amounts of foreign exchange overseas despite reporting comparatively small domestic business activity.
According to the Department’s statement dated August 18, several entities were identified for further scrutiny after their overseas remittances over the past three years appeared disproportionate to their declared financial profiles.
Shell entities under scrutiny
The preliminary verification has raised questions about a group of entities allegedly operating through fictitious charitable trusts and accommodation-entry arrangements involving purported donations or contributions.
The Department said some of the entities involved in large outward remittances were either non-filers of income-tax returns or reported very small turnovers. Their declared business activities also appeared inconsistent with the scale of funds being transferred abroad.
In some cases, the stated reasons for remitting money overseas—including payments related to freight, software imports and consultancy services—did not appear to correspond with the information gathered during ground verification.
Investigators also found instances where entities apparently were not functioning from the addresses declared in their official records.
Questions raised over Form 15CB certifications
The data analysis also highlighted the involvement of a relatively small group of professionals in issuing a large number of Form 15CB certificates connected with these foreign remittances.
Form 15CB is used in specified circumstances when an accountant certifies matters relating to the taxability of a proposed remittance to a non-resident. The Department’s latest exercise has raised questions about whether adequate due diligence was undertaken before some of the certificates were issued.
The issue assumes significance because professional certification forms an important compliance layer in India’s cross-border payment system.
Verification covers 394 entities and 36 professionals
The Income Tax Department launched the nationwide verification operation on August 18, 2026.
The exercise is examining three broad categories:
- Entities involved in suspicious foreign remittances
- Individuals and organisations behind those entities
- Professionals who issued the associated Form 15CB certificates
According to the Department, the verification has so far covered approximately 394 entities, including 117 entities located in districts along India’s land borders, as well as 36 professionals.
The inclusion of entities located in border districts indicates that the verification exercise is not limited to major metropolitan centres and is being conducted across multiple parts of the country.
Accountants reminded of professional responsibility
The Department has also emphasised the responsibility of accountants issuing Form 15CB/Form 146 certificates.
Professionals are expected to apply appropriate care, due diligence and professional judgment while examining the transactions and relevant supporting facts before certifying foreign remittances.
The Department’s action does not, by itself, establish wrongdoing by every entity or professional covered by the exercise. Rather, the verification is intended to determine whether the transactions, declarations and supporting documentation comply with applicable tax requirements.
Investigation continues
The Income Tax Department has indicated that further investigation is underway. The exercise is expected to examine the underlying transactions, the entities involved, the individuals controlling or operating them and the professional certifications associated with the remittances.
The development highlights the increasing use of data analytics, financial intelligence and field verification by tax authorities to identify transactions that appear inconsistent with declared business activity.
For businesses and professionals involved in international payments, the episode also underlines the importance of maintaining proper documentation, establishing the commercial purpose of transactions and exercising appropriate professional diligence before certifying or executing cross-border remittances.
Why this matters
Cross-border remittances involving imports, services, consultancy, freight and other legitimate commercial activities form an important part of India’s international economic activity. At the same time, transactions that lack a clear economic rationale or appear inconsistent with the financial profile of the entities involved can attract regulatory scrutiny.
The current verification exercise therefore represents an effort by the tax administration to examine whether declared transactions accurately reflect genuine underlying economic activity and whether the required compliance checks were properly performed.
Sanchita Banerjee
IBG NEWS
Source: Central Board of Direct Taxes (CBDT), Ministry of Finance, Government of India — statement dated 18 August 2026. The article above is an original news rewrite based on the attached official document and does not reproduce the source release verbatim.
