The income-tax department has launched a nationwide detailed exercise on August 18, 2026 to verify suspicious foreign remittances from entities located in districts along India's land borders. According to the Central Board of Direct Taxes (CBDT), the exercise covered approximately 394 entities, including 117 located in land-border states, and 36 professionals who issued Form 15CB certificates. Officials told PTI that the alleged illegal transactions are worth a few crores of rupees and were being sent to about a dozen foreign jurisdictions. The department found that preliminary ground verification revealed that entities making these remittances were either non-filers or were filing income tax returns showing very small turnovers, with turnovers showing no apparent correlation with the large amounts being remitted abroad.
The income-tax department is actively working to reduce uncertainty and inconsistent outcomes in international tax matters as cross-border transactions and increasingly sophisticated business structures make tax administration more complex. According to reports from Business Standard, Monica Bhatia, principal chief commissioner of income tax (international tax), emphasized that the department is working with taxpayers and other stakeholders through outreach programmes on the new Income Tax Act, both domestically and with global taxpayers through its Income Tax Overseas Units, to identify areas where further clarity and guidance are needed. This strategic approach comes as the department navigates the evolving landscape of international taxation, particularly in light of the OECD's Inclusive Framework on Base Erosion Profit Shifting (BEPS), which continues to develop a two-pillar approach to address tax avoidance and ensure coherence of international tax rules. The BEPS 2.0 reform package specifically looks to address challenges arising from the taxation of the digital economy and ensure a more transparent tax environment for multinational organizations.
The department is examining areas where uncertainty and ambiguity persist and working towards providing greater clarity in the interpretation and administration of international tax provisions. As reported by Business Standard, Bhatia stated that it is a journey that we are trying to traverse together, highlighting the collaborative approach between the department and stakeholders. A key focus is ensuring greater consistency in how tax officers handle international tax matters, particularly as cases involving cross-border transactions and multinational businesses become more complex. Different approaches in similar cases can increase uncertainty for taxpayers and potentially result in prolonged disputes. The department's efforts align with the broader BEPS 2.0 reform package, which specifically looks to address challenges arising from the taxation of the digital economy and ensure a more transparent tax environment for multinational organizations.
The department's investigation revealed significant concerns about the adequacy of due diligence conducted by accountants issuing Form 15CB certificates. According to the CBDT statement, further analysis of the data also 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. Form 15CB requires accountants to verify the taxability of foreign remittances with reference to books of account and other relevant documents. The CBDT emphasized that accountants issuing certificates in Form 15CB/Form 146 exercise due care, diligence and professional judgment, and should properly examine underlying transactions and relevant facts before certifying remittances, as these certifications play an important role in maintaining trust in the system.
The official's comments come against the backdrop of growing complexity in international taxation, with tax administrations globally seeking to balance enforcement with greater certainty for businesses. As reported by Business Standard, the department's approach would continue to evolve as it works with taxpayers, tax professionals and international counterparts to address areas where greater clarity is required. The department's strategic focus on reducing uncertainty reflects the broader trend of international tax administrations worldwide working to provide more predictable outcomes for cross-border business operations. This aligns with the OECD's BEPS 2.0 initiative, which aims to address the challenges of the digital economy and ensure coherence of international tax rules for multinational organizations globally. The BEPS 2.0 framework represents a comprehensive approach to international taxation that will impact multinational organizations across many countries, requiring careful assessment and operational restructuring to comply with the new regulations.
