Income Tax Dept identifies suspicious entities sending money abroad; 394 entities under scanner

The Income Tax Department has launched a nationwide verification exercise into suspected irregularities involving large foreign remittances made by entities with little or no reported business activity. The exercise will also examine professionals who issued certificates linked to these outward remittances.

The Central Board of Direct Taxes (CBDT) said on August 18 that it identified several suspicious entities after analysing data on outward foreign remittances and gathering ground intelligence. The entities had remitted substantial amounts of foreign exchange over the past three years despite reporting very small turnovers or not filing income-tax returns.

“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,” the I-T department said.

Shell entities under scanner

The investigation follows a search operation involving a group of fictitious charitable trusts allegedly engaged in providing accommodation entries against bogus donations and contributions. Preliminary verification found that several entities making the foreign remittances were either non-filers or reported turnovers that did not appear proportionate to the amounts sent overseas.

The department also found that the stated purposes of some remittances did not appear consistent with the entities' financial profiles. These included payments purportedly made for freight, software imports and consulting services.

MUST SEE: ₹1 crore foreign asset disclosure could cost 60% under FAST-DS: Check the math

Ground-level intelligence further indicated that some of the entities were not operating from the addresses declared in their official records, raising concerns that they could be shell or non-genuine entities.

Form 15CB certificates examined

The department's data analysis also identified a concentration of Form 15CB certificates among a relatively small group of professionals. The funds remitted abroad were similarly found to have been received by a clustered group of entities.

Form 15CB requires an accountant certifying a foreign remittance to examine its taxability based on the taxpayer's books of account and other relevant documents. The CBDT said the findings have raised questions about whether adequate due diligence was undertaken before some of these certificates were issued.

Under the Income-tax Rules, 2026, Form 146 read with Rule 220 corresponds to the earlier Form 15CB and Rule 37BB framework.

MUST READ: RBI’s surprise FCNR (B) move leaves banks scrambling as communication concerns grow: Report

394 entities, 36 professionals covered

The nationwide verification exercise began on August 18 and is focused on shell entities, the individuals behind them and professionals who issued Form 15CB certificates.

The exercise covers approximately 394 entities, including 117 entities located in states along India's land borders. The department is also examining 36 professionals involved in issuing the certificates.

The focus on entities operating in land-border states is part of the department's wider verification exercise into potentially suspicious outward movement of foreign exchange.

CBDT warns certifying professionals

The CBDT has stressed that accountants issuing Form 15CB or Form 146 certificates are expected to exercise due care, diligence and professional judgment.

They are required to properly examine the underlying transactions, supporting documents and relevant facts before certifying foreign remittances. The department said such certifications play an important role in maintaining trust and compliance within the tax system.

The Income Tax Department said investigations into the identified entities, transactions and professionals are continuing. Further action will depend on the findings of the ongoing verification exercise.

ALSO READ: ‘What does the middle class get?’: Shehzad Poonawalla seeks scrapping of income tax for salaried Indian