India’s Income Tax Department has launched a nationwide verification drive into suspicious overseas transfers, targeting shell companies, fake charitable trusts, and unauthorised accountants, amid reforms to foreign remittance reporting systems.
India’s Income Tax Department has begun a nationwide verification drive targeting what it described as suspicious foreign remittances routed through entities with little or no real business activity, as well as the professionals who certified the payments. In a post on X, the department said the exercise covers about 394 entities, including 117 in land-border states, and 36 professionals, after data analysis and field intelligence pointed to large overseas transfers that did not appear to match the businesses behind them.
According to the department, the scrutiny is aimed at shell companies, the people operating them and chartered accountants who issued the relevant tax certificates. Officials said preliminary checks found that many of the entities were either non-filers or reported only tiny turnovers, even though they had sent substantial sums abroad over the past three years. In some cases, the stated purposes of the remittances, such as freight, software imports or consulting fees, did not appear to match the underlying activity.
The department also said a search linked to fictitious charitable trusts uncovered a wider network used to move funds overseas. It said further verification showed that several of the entities were not operating from the addresses they had declared, and that a relatively small group of professionals had issued a large number of the certificates. That clustering, officials said, raised questions about whether proper checks were carried out before the remittances were approved.
The warning comes as India has recently overhauled its foreign remittance reporting system. The Income Tax Department’s e-filing portal now uses Forms 145 and 146, which replaced the earlier Forms 15CA and 15CB from April 1, 2026. Form 145 is the remitter’s declaration, while Form 146 is the chartered accountant’s certificate required for taxable remittances above Rs 5 lakh, confirming tax deduction at source and compliance with double taxation agreements. The department has urged accountants to exercise due care and verify the books and supporting documents before certifying payments, saying those certificates are central to trust in the system.
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