The Income Tax Department has launched a nationwide detailed verification exercise targeting suspicious foreign remittances, as reported by Livemint, NDTV, ET Wealth Online, News9, Business Standard, and The Times of India. The investigation was initiated after data analysis and ground intelligence revealed that some entities were sending large amounts of money overseas despite having little or no reported business activity. The department has specifically asked professionals issuing Form 15CB/Form 146 certificates to conduct proper checks and exercise due diligence before approving such transactions. As per ET Wealth Online, the department announced on August 18, 2026, that they have undertaken verification of suspicious foreign remittances based on ground intelligence and analysis of data on outward foreign remittances. According to The Times of India, the department conducted this nationwide field verification exercise, including in some border districts, against a group of entities and fictitious charitable trusts, alleged to have sent large amounts of funds outside the country over last three years. The department has emphasized the importance of exercising due diligence and sound judgment by professionals while issuing certificates in Form 15CB/Form 146, as these certifications play an important role in maintaining trust in the system.
The probe reveals the massive scale of foreign remittances, with 6,422 entities remitting ₹1.29 lakh crore abroad in Q2 FY26, as reported by NDTV Profit. A significant 72.3% of the total outflow went to five jurisdictions—Singapore, UAE, Hong Kong, Mauritius and China. Singapore topped the list with ₹41,885 crore, followed by the UAE at ₹18,331 crore and Hong Kong at ₹18,064 crore. Another ₹36,175 crore was remitted by 83 entities with foreign addresses. The pace of remittances has accelerated dramatically, with ₹43,048 crore remitted abroad in H1 FY26, already equivalent to 78% of the full-year FY25 figure. The tax authorities are examining the stated purpose of transactions, with ₹44,474 crore reported as long-term capital gains, ₹27,128 crore as 'other income' and ₹16,423 crore as freight charges. According to NDTV Profit, the entities under investigation are largely paper companies, with authorities tracing the actual source and ultimate destination of the funds, including the beneficiaries behind the overseas transfers. As per The Times of India, investigators found that a significant share of the funds was routed to a small group of overseas destinations, with Singapore, the UAE, Hong Kong, Mauritius and China together receiving 72.3% of the total remittances.
Preliminary ground verification revealed that the entities making these remittances were either non-filers or were filing income-tax returns showing very small turnovers, as reported by Livemint, NDTV, ET Wealth Online, News9, and Business Standard. The turnovers had no apparent correlation with the large amounts of money being remitted abroad. According to NDTV Profit, these transactions are being examined against the underlying activity to establish whether the stated purpose, source of funds, destination and beneficiaries match. The remittances did not seem to match the stated purpose of the remittances, such as payment for freight, import of software, or import of consulting services. Business Standard reports that further analysis of the data also revealed that a large number of Form 15CB certificates were issued by a relatively small group of professionals, with the remitted funds also received by a clustered group of entities. Additionally, data showed a large number of Form 15CB certificates were issued by a relatively small group of professionals, raising concerns about the integrity of the certification process. According to News9, some entities had claimed that payments were being made for purposes such as freight, software imports or consulting services, but preliminary verification found that several of these entities were not operating from the addresses they had declared. As per The Times of India, investigators are now looking into where the funds originated, the nature and purpose of the transactions and the beneficiaries receiving the money overseas.
Form 15CB, read with Rule 37BB of the Income-tax Rules, 1962, requires the Accountant certifying a foreign remittance to verify its taxability with reference to the books of account and other relevant documents, according to Livemint. The corresponding provisions under the Income-tax Rules, 2026 are Form 146 read with Rule 220. The department emphasizes that Accountants issuing certificates in Form 15CB/Form 146 are expected to exercise due care, diligence and professional judgment, properly examining underlying transactions and relevant facts before certifying remittances. However, these findings raise questions about whether adequate due diligence was carried out by the Accountants before issuing these certificates. Chartered Accountant Aarjav Jain, Executive Director and NRI Tax Expert, explains that this is a natural extension of the tax department's data-matching push, now applied to outward remittances. He notes that the verification drive itself is a resident-taxpayer story, as LRS applies to residents sending money abroad, and banks report these transactions, so a mismatch against the ITR gets flagged automatically. CA Aarjav Jain advises that if a notice lands, don't ignore it - pull together source-of-funds proof, prior returns, and the Form 145/146 paperwork, and respond within the window given. According to Business Standard, the department has therefore included 36 professionals in the verification exercise, with the message for professionals being significant: a Form 15CB certification is not simply a formality. CA Nishant Shanker from Navraj Global Advisors emphasizes that Form 15CB is not a formality - the CA is certifying the nature and taxability of the remittance and the applicable TDS position. A certificate issued without examining the underlying transaction can create problems for both sides, with the taxpayer facing tax demands, interest, penalties and further scrutiny, while the accountant could face separate professional consequences.
Further investigations are currently underway following the nationwide verification exercise, as reported by Livemint, NDTV, ET Wealth Online, News9, Business Standard, and The Times of India. The department has uncovered a nationwide network of entities engaged in remitting funds abroad during search operations conducted on a group of fictitious charitable trusts involved in providing accommodation entries against bogus donations/contributions. The investigation traces back to a search involving a network of fictitious charitable trusts allegedly providing accommodation entries against bogus donations and contributions. The findings raise significant concerns about the integrity of the foreign remittance system and the need for enhanced due diligence procedures. According to The Times of India, the department said in a press statement issued on Tuesday that action had already been taken against 394 firms, while a broader set of companies and individuals is now under scrutiny. The department has emphasized that the probe is still on and real modus operandi can emerge only after a few days, with senior officials in the department of revenue closely monitoring the investigation. The Department's latest exercise is therefore aimed not merely at examining individual remittances but at tracing the broader network of shell entities, persons controlling or operating them and professionals involved in certifying the transactions. The exercise formally commenced on August 18, 2026, and has been designed as a nationwide operation covering the complete chain surrounding suspicious remittances, including determining whether remitting entities actually carried on the business claimed, whether recipients abroad provided stated goods or services, whether consideration was commercially justified, and whether transactions were appropriately accounted for. According to News9, at this stage, the exercise is a verification process and the department has not said that every entity or professional covered has committed a violation.
