FOREIGN REMITTANCES UNDER IT SCANNER: CBDT LAUNCHES NATIONWIDE VERIFICATION

The Income Tax Department has launched a nationwide verification exercise into suspicious foreign remittances, covering approximately 394 entities and 36 professionals. The exercise, announced by the CBDT on 18 August 2026, highlights the Department’s increasing use of data analysis and ground intelligence to identify potentially irregular cross-border transactions.

KEY HIGHLIGHTS OF THE VERIFICATION EXERCISE

The exercise covers:

• Approximately 394 entities involved in significant foreign remittances.

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• 117 entities located in States along India’s land borders.

• 36 professionals associated with certification of foreign remittances.

• Entities suspected of having little or no genuine business activity.

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• Professionals who issued Form 15CB certificates, with the corresponding Form 146 applicable under the Income-tax Rules, 2026.

WHY ARE THESE FOREIGN REMITTANCES UNDER SCRUTINY?

According to the CBDT Press Release dated 18 August 2026, data analysis and ground intelligence identified entities that had remitted substantial amounts of foreign exchange during the preceding three years.

Preliminary verification indicated that some of these entities:

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

• Had turnovers that showed no apparent correlation with the large amounts remitted abroad.

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

• Were reportedly not operating from their declared addresses.

The investigation followed the uncovering of a nationwide network of entities during a search operation involving fictitious charitable trusts allegedly engaged in providing accommodation entries against bogus donations or contributions. 

FORM 15CB / FORM 146 CERTIFICATIONS ALSO UNDER SCRUTINY

The CBDT has also examined the pattern of certifications issued for foreign remittances.

The Department found that a relatively small group of professionals had issued a large number of Form 15CB certificates, while the remitted funds were received by a clustered group of entities. This raised concerns about whether adequate due diligence had been undertaken before certification. (mint)

For remittances made from 1 April 2026 onwards, Form 146 is the new equivalent of Form 15CB under the Income-tax Rules, 2026. The Income Tax Department confirms that Form 145 replaces Form 15CA, while Form 146 corresponds to the earlier Form 15CB. (Income Tax India)

Under Rule 220 of the Income-tax Rules, 2026, the applicable framework covers the reporting and certification requirements for foreign remittances. Form 145 is required before making the remittance, with Form 146 required in specified cases. (Income Tax India)

WHAT SHOULD BUSINESSES AND TAXPAYERS DO?

The verification exercise does not mean that legitimate foreign remittances are prohibited or automatically suspicious. However, businesses making overseas payments should ensure that their transactions are properly documented and commercially justified.

Businesses should:

• Maintain invoices, agreements, purchase orders and other supporting documents.

• Ensure the nature and purpose of the payment are clearly established.

• Keep books of account and tax-return disclosures consistent with the underlying transactions.

• Verify the taxability of payments to non-residents and applicable TDS requirements.

• Ensure that the information reported in the relevant remittance forms is accurate.

• Maintain adequate documentation supporting the commercial purpose and recipient of the payment.

The Income Tax Department’s official guidance confirms that Form 145 is used for furnishing information relating to payments to non-residents or foreign companies, while Form 146 may be required where a Chartered Accountant’s certificate is applicable. (Income Tax India)

MESSAGE FOR TAX PROFESSIONALS

The CBDT has specifically emphasised that Accountants issuing Form 15CB/Form 146 should exercise due care, diligence and professional judgment.

Professionals are expected to properly examine the underlying transactions, relevant facts, books of account and supporting documents before certifying a foreign remittance. The Department has stressed that such certifications play an important role in maintaining trust in the tax compliance system. 

WHAT THIS MEANS FOR INDIAN BUSINESSES

The latest exercise reinforces an important compliance principle: foreign remittances should be supported by genuine transactions, proper documentation and a clear commercial rationale.

Businesses should therefore review their overseas payment processes, particularly where there are high-value remittances, limited reported turnover, unusual payment descriptions or transactions involving related or unfamiliar overseas parties.

CONCLUSION

The CBDT’s nationwide verification exercise covering approximately 394 entities and 36 professionals signals increased scrutiny of suspicious outward foreign remittances. With data analytics and ground intelligence being used together, businesses should ensure that their financial records, tax filings, remittance documentation and actual business activities are properly aligned.

Further investigations are currently underway, and taxpayers involved in overseas transactions should take this opportunity to review their compliance processes and seek professional advice where necessary. 

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

EXCERPT: CBDT is scrutinising suspicious foreign remittances involving 394 entities and 36 professionals, highlighting the need for proper documentation and due diligence.

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