The Income Tax Department has launched a nationwide verification exercise targeting what it believes are 'suspicious' foreign remittances made by entities reporting little or no business activity. According to the department, the exercise covers around 394 entities, including 117 located in states along the country's land borders, as well as 36 professionals. As reported by PTI, the action follows analysis of financial data and ground-level intelligence that pointed to sizable overseas remittances by entities with little or no declared business operations. The department has also warned chartered accountants about issuing Form 15CB/Form 146 certificates, urging them to apply appropriate care, diligence and professional judgment, stating that these certifications play an important role in maintaining trust in the system. On 18.08.2026, the Department launched a nationwide detailed verification exercise to verify these foreign remittances, focussing on shell entities, the persons behind them, and the professionals who have issued Form 15CB certificates. The exercise has covered approximately 394 entities (including 117 entities located in land-border States), and 36 professionals.
The Income-tax Act, 2025 has introduced Section 397(3)(d) to replace the existing compliance mechanism under Section 195(6) of the Income-tax Act, 1961. This new framework introduces Forms 145 and 146 to govern payments to non-residents, replacing the previous Forms 15CA and 15CB. The framework retains the decision-making approach of the earlier provisions while updating statutory references and maintaining the fundamental objective of ensuring appropriate tax deduction on foreign remittances before remittance outside India.
Form 145 serves as the primary compliance document under the new framework, with different parts applying based on remittance amounts and taxability. Form 145 Part A covers taxable payments up to ₹5 lakh during the financial year, while Form 145 Part B applies to taxable payments above ₹5 lakh when an Assessing Officer's certificate is available. Form 145 Part C requires Form 146 when the Assessing Officer's certificate is not available. The framework introduces a ₹5 lakh threshold computed on the aggregate remittance during the financial year, with the key to compliance remaining correct determination of taxability, aggregate value of remittances, and availability of Assessing Officer's certificate.
Form 146 is a Chartered Accountant's certificate for certain taxable payments made to a Non-Resident Indian (NRI) or foreign company. According to reports from Mint, it helps determine whether the payment is taxable in India and how much TDS should be deducted before the money is sent abroad. The form is generally required when the payment is taxable in India, the total payment exceeds ₹5 lakh during the tax year, and the taxpayer has not obtained the required certificate from the Assessing Officer. For remittances from 1 April 2026, Forms 145 and 146 under the new tax framework apply, making it an event-based form requiring separate filing for every remittance that meets these conditions. Form 146 covers comprehensive details including remitter and recipient information, remittance and bank details, taxability under the Income Tax Act, taxability under applicable DTAA, TDS details, and verification. 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 Accountant certifying a foreign remittance to verify its taxability with reference to the books of account and other relevant documents.
Using ground intelligence and analysis of data relating to outward foreign remittances, the Income Tax Department has identified several entities that have transferred substantial amounts of foreign exchange overseas over the past three years. The department's investigation uncovered a nationwide network of entities involved in sending funds abroad during a search operation targeting a group of fictitious charitable trusts involved in providing accommodation entries against bogus donations/contributions. Initial field-level checks found that the entities making these overseas transfers either had not filed income-tax returns or had reported only very modest turnover in their returns. The declared turnover did not appear to correspond with the sizable sums being sent abroad, and the stated reasons for remittances, including payments for freight, software imports and consulting services, also did not appear consistent with the amounts involved. Further analysis 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. Further ground-level intelligence revealed that these entities were not actually operating from the addresses declared by them. The findings raise concerns about whether adequate due diligence was carried out by the Accountants before issuing these certificates. According to the Finance Ministry, some of these entities were either not filing income-tax returns or were reporting very small turnovers, which appeared inconsistent with the large sums they were sending abroad.
The Central Board of Direct Taxes (CBDT) has granted multiple relaxations in electronic filing due to technical issues with the new e-filing portal. Initially, manual filing was allowed until 15th July 2021, which has now been extended to 15th August 2021. This marks the third time CBDT has relaxed electronic filing requirements since the launch of the new portal on 7th June 2021. The relief measures address practical problems where banks were not permitting foreign remittances due to the absence of Forms 15CA/15CB. After successful filing of Form 145, Part C, the corresponding Form 146 is marked as 'Consumed' in the e-filing portal, with each Form 146 being used only once for corresponding Form 145 filing. The framework introduces a specified list of transactions where reporting is not required, with Part D merely reporting that the payment is not chargeable to tax and no Chartered Accountant certificate is required. The department said further investigations are currently underway, with the exercise coming as tax authorities increasingly use data analysis and ground intelligence to identify transactions that do not appear to match the financial profile or stated activities of taxpayers.
