IT dept flags suspicious foreign remittances

On August 18, 2026, the Income Tax Department announced they had begun a verification process for suspicious foreign remittances, based on intelligence and data analysis of outward foreign remittances. They identified entities that sent large sums abroad over three years. The Department said they would focus on shell entities, their operators, and those who issued Form 15CB certificates. They also warned of entities in Indian border areas being scrutinized.

The exercise covered about 394 entities, including 117 in border states, and 36 professionals. Further investigations are ongoing. A recent search found a network of entities abroad remitting funds, often from fictitious charitable trusts. These entities were either non-filers or filed minimal income-tax returns, with no clear link between their small turnover and large remittances. They also failed to match declared purposes, such as payments for freight or services.

The Department found that many Form 15CB certificates were issued by a few professionals, and remittances went to a small group of entities. CA Ashish Niraj of A S N & Company said this is a much-needed action as many shell companies were used for large remittances abroad, and often TDS was not correctly deducted. He noted that the Department is concerned about possible financial irregularities and wider implications.

Form 15CB requires a CA to certify a foreign remittance's taxability based on books of account and other documents. Banks process remittances only after receiving the certificate. However, the Department questioned if sufficient due diligence was done by CAs when issuing these certificates. Niraj suggested that the drive will help catch malpractices.

The Income Tax Department urged CAs to exercise due care, diligence, and professional judgment when issuing Form 15CB/Form 146 certificates. They should thoroughly examine the transactions and relevant facts before certifying the remittances, as these certifications are crucial for maintaining trust in the system.