I-T Department scans 394 entities over suspicious foreign remittances

The Income Tax Department has launched a nationwide verification exercise covering 394 entities and 36 professionals after detecting large foreign remittances that appeared inconsistent with the entities’ reported turnover and business activities, the Central Board of Direct Taxes (CBDT) said on Tuesday. The exercise follows analysis of outward foreign-remittance data for the past three years along with ground-level intelligence. Tax authorities found instances in which entities with little or no reported business activity had sent substantial amounts of foreign exchange overseas.

Shell entities under lens

According to the department, the network came to light during a search operation involving a group of fictitious charitable trusts allegedly providing accommodation entries against bogus donations and contributions. Subsequent analysis led investigators to a wider network of entities involved in overseas remittances.

Preliminary verification found that some of the entities were either not filing income-tax returns or were declaring very small turnovers. Authorities said the financial profiles did not correspond with the substantial sums being transferred overseas.

Questions were also raised about the stated reasons for some transfers. Payments were described as being for purposes such as freight, software imports and consultancy services, but the department found that the amounts did not appear consistent with the entities’ declared operations. Ground checks also indicated that some were not operating from their registered addresses.

The verification drive is focusing on possible shell entities, the people behind them and the professionals involved in certifying the transactions.

Border states in focus

Of the approximately 394 entities covered by the exercise, 117 are located in land-border states. Authorities have specifically included entities in districts along India's international land borders that were found to be remitting significant amounts abroad.

The investigation also found that a large number of certificates connected with the transactions had been issued by a relatively small group of professionals. At the receiving end, the money was similarly flowing to a clustered group of overseas entities, according to the department.

Professionals face scrutiny

The exercise covers 36 professionals who issued Form 15CB certificates relating to foreign remittances.

Form 15CB, under the Income-tax Rules, requires an accountant to determine the tax implications of certain overseas remittances after examining relevant books, documents and the underlying transaction. The department said the patterns uncovered during its analysis raised concerns over whether sufficient due diligence had been undertaken before some certificates were issued.

The Income Tax Department has consequently advised professionals issuing Form 15CB and the corresponding Form 146 under the Income-tax Rules, 2026, to exercise due care, diligence and professional judgment while certifying transactions.

The latest verification exercise combines financial data analysis with field-level checks, allowing tax authorities to examine not only individual transfers but also common links between remitting entities, certifying professionals and overseas recipients.

The department said those contacted as part of the exercise should cooperate with the verification process and provide the necessary information and documentation.