Foreign Remittances Under IT Scanner: CBDT Launches Nationwide Verification Exercise

The Income Tax Department has launched a nationwide verification exercise into suspicious foreign remittances, covering entities and professionals identified through data analysis and ground-level intelligence. The exercise highlights the increasing scrutiny of overseas payments and the importance of proper documentation and professional due diligence.

394 Entities and 36 Professionals Under Verification

As per the CBDT Press Release dated 18 August 2026, the verification exercise covers approximately:

• 394 entities that made significant foreign remittances.

  Need help with this? Talk to A. S. Darve & Co. →

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

• 36 professionals who issued certificates relating to foreign remittances.

The Department is examining the entities making the remittances, the persons behind them and the professionals involved in certifying the transactions. Further investigations are currently underway. (mint)

Why Are These Foreign Remittances Under Scrutiny?

The Department identified certain entities that had remitted substantial amounts of foreign exchange despite having little or no reported business activity.

The verification has reportedly identified patterns such as:

• Entities that were not filing income-tax returns or reported very small turnovers.

  Need help with this? Talk to A. S. Darve & Co. →

• Large foreign remittances that appeared disproportionate to reported turnover.

• Payments stated to be for freight, software imports or consulting services that did not appear consistent with the entities' financial profile.

• Entities that were reportedly not operating from their declared addresses.

• Concentration of foreign remittances among certain entities and professionals.

The exercise follows the discovery of a network of entities during a search operation involving fictitious charitable trusts allegedly engaged in accommodation entries against bogus donations or contributions. (SCC Online®)

Form 15CB and Form 146 Certifications Also Under Scrutiny

An important aspect of the exercise is the scrutiny of professional certifications for foreign remittances.

Under the earlier framework, Form 15CB was governed by Rule 37BB of the Income-tax Rules, 1962. For remittances governed by the new Income-tax Act, 2025 from 1 April 2026, Form 146 corresponds to the earlier Form 15CB and is prescribed under Rule 220 of the Income-tax Rules, 2026. (Income Tax Department)

The Department's data analysis found that a large number of Form 15CB certificates had been issued by a relatively small group of professionals. This has raised questions regarding whether adequate examination and due diligence were undertaken before certification.

What Should Businesses Do?

Businesses making genuine overseas payments should ensure that the transaction is properly supported and consistent with their actual business activities.

Businesses should maintain, wherever applicable:

• Agreements, purchase orders and invoices.

• Details of the goods or services received.

• Bank and payment records.

• Accounting records supporting the transaction.

• Appropriate taxability and withholding-tax analysis.

• Relevant foreign remittance forms and certificates.

• Supporting documents establishing the commercial purpose of the payment.

The key concern is not legitimate foreign remittances themselves, but transactions where the underlying business activity, financial records and remittance do not appear to be consistent.

Message for Chartered Accountants and Other Professionals

The CBDT has specifically emphasised that professionals issuing Form 15CB/Form 146 are expected to exercise due care, diligence and professional judgment.

Before issuing a certificate, the underlying transaction and relevant facts should be properly examined with reference to the books of account and supporting documents. (mint)

Professionals should therefore avoid relying solely on client representations or isolated documents. The overall commercial substance and tax implications of the remittance should be appropriately considered.

Key Takeaway

The CBDT's latest exercise demonstrates the increasing use of data analytics and ground intelligence to identify inconsistencies between reported business activity and overseas financial transactions.

The verification currently covers approximately 394 entities and 36 professionals, and further investigations are underway. Businesses making foreign remittances should therefore maintain a clear documentary trail and ensure that overseas payments are properly supported, commercially justified and tax compliant.

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

EXCERPT: CBDT is scrutinising suspicious foreign remittances involving 394 entities and 36 professionals. Businesses and professionals should ensure proper documentation and due diligence.

SEO_TITLE: Foreign Remittances Under IT Scanner | CBDT

SEO_DESCRIPTION: CBDT is verifying suspicious foreign remittances. Learn what businesses and professionals should check. Read the latest tax update today.