Income tax dept has identified suspicious entities that sent money abroad, launches verification drive; Know what to do

On August 18, 2026 the Income Tax Department announced that they have undertaken verification of suspicious foreign remittances based on ground intelligence and analysis of data on outward foreign remittances.

The Income Tax Department has said in a press release that they have identified several suspicious entities that remitted large amounts of foreign exchange over the last three years.

The Income Tax Department press release said: “On August 18, 2026, the Department launched a nationwide detailed verification exercise to verify these foreign remittances, focusing on shell entities, the persons behind them, and the professionals who have issued Form 15CB certificates.”

Indian Border areas also under watch

The Income Tax Department said that entities located in districts along the country’s land borders and remitting significant amounts of money abroad have also been covered in the exercise. The exercise has covered approximately 394 entities (including 117 entities located in land-border States), and 36 professionals.

The Income Tax Department said that further investigations are currently underway.

Recent tax search revealed nationwide network of entities remitting money abroad

The Income Tax Department said that a nationwide network of entities engaged in remitting funds abroad was uncovered during a search operation conducted on a group of fictitious charitable trusts involved in providing accommodation entries against bogus donations/contributions.

Preliminary ground verification revealed that the entities making these remittances were either non-filers or were filing income-tax returns showing very small turnovers.

The tax department said that the turnovers of these suspicious entities had no apparent correlation with the large amounts of money being remitted abroad. They also did not appear to match the stated purpose of the remittances, such as payment for freight, import of software, or import of consulting services.

The Income Tax Department said: “Further ground-level intelligence revealed that these entities were not actually operating from the addresses declared by them.”

So the Income Tax Department officers did a further analysis of the data and this revealed that a large number of Form 15CB certificates were issued by a relatively small group of professionals and the remitted funds were also received by a clustered group of entities.

Chartered Accountant Ashish Niraj, Partner, A S N & Company, said to ET Wealth Online: “This is a much needed drive launched by the Department. Many shell companies are being operated by some persons whereby large amounts of funds were remitted abroad. Also in most of cases of such shell companies, TDS was not correctly deducted as per the provisions.

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Gaurav Makhijani- Managing Partner at MGA says that the Income Tax Department routinely uses data analytics to track foreign remittances, and such transaction-level information can subsequently form the basis for queries or verification during tax proceedings.

Makhijani says: "What appears different in the present communication is the seriousness of the concerns flagged by the Department, including potential financial irregularities and, in certain cases, concerns having wider implications beyond conventional tax compliance. The focus on remittances involving entities or persons in sensitive border regions also indicates a heightened level of scrutiny."

What is Form 15CB?

Form 15CB, read with Rule 37BB of the Income-tax Rules, 1962 (corresponding to Form 146 read with Rule 220 of the Income-tax Rules, 2026), requires the Chartered Accountant certifying a foreign remittance to verify its taxability with reference to the books of account and other relevant documents.

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However, based on the suspicious entity on which the tax search was conducted, the Income Tax Department said that it raises concerns about whether adequate due diligence was carried out by the Chartered Accountants before issuing these certificates (Form 15CB).

As per Income Tax Act 1961, 15CB is CA Certificate which ascertains the tax impact of such transaction, Banks proceed with remittances only after getting 15CB in cases where applicable. However, Niraj sasy that there have been some instances where some CA’s have given 15CB certificates to such shell companies. This drive will help catch malpractices."

CA Aarjav Jain, Executive Director and NRI Tax Expert, Dinesh Aarjav and Associates says that Form 15CA/15CB is now renumbered as Form 145 and Form 146 under the Income Tax Act, 2025. Form 15CA/CB is the compliance step for NRIs repatriating money out of India, like property or investment sale proceeds.

Jain says: "Form 146 is the CA's certificate on the nature and taxability of the payment; Form 145 is the remitter's own declaration; banks won't process the transfer without both where required. The new forms are more data-integrated for backend cross-verification, so a sloppily filled Form 146 that doesn't match what was actually offered to tax is exactly the kind of mismatch that draws scrutiny."

What to do?

The Income Tax Department said that they urge the chartered accountants to be very careful about issuing certificates in Form 15CB/Form 146 as they are expected to exercise due care, diligence and professional judgment.

The Income Tax Department said that the CAs should properly examine the underlying transactions and relevant facts before certifying the remittances, as these certifications play an important role in maintaining trust in the system.

Jain advices that if a notice comes don't ignore it. First you should pull together source-of-funds proof, prior income tax returns (ITRs), and the Form 145/146 (Form 15CB/CA) paperwork, and then respond within the window given in the notice as ignoring it is what turns a routine verification into a full reassessment.

Makhijani, said to ET Wealth Online that for businesses, this development is a reminder that foreign remittances should be supported by robust commercial documentation, including contracts, invoices, underlying agreements and evidence of the business purpose.

Makhijani says: "Chartered Accountants also need to exercise appropriate professional due diligence while issuing Form 15CB, as the certificate involves examination and certification of the taxability and other particulars of the remittance"

With the Income Tax Department increasingly relying on data analytics, consistency between the underlying transaction, tax filings, banking records and remittance documentation will be particularly important. Makhijani says: "Companies should there be extremely particular about their compliances in India."