SRINAGAR: The Income Tax Department has launched a nationwide verification exercise into suspicious foreign remittances after identifying several entities that allegedly transferred large sums of money abroad despite reporting very small turnovers.
The department said the action was based on ground intelligence and data analysis of outward foreign remittances over the past three years. The exercise follows the uncovering of a network of entities during a search operation involving fictitious charitable trusts allegedly engaged in providing accommodation entries against bogus donations and contributions.
Preliminary ground verification found that several entities making the remittances were either non-filers or had filed income-tax returns showing very small turnovers that did not appear to correspond with the large sums being sent overseas.
The department also found that the stated purposes of the remittances—including payments for freight, software imports and consulting services—did not appear to match the entities’ actual activities. Ground-level inquiries further indicated that some of the entities were not operating from the addresses declared by them.
The data analysis also flagged a large number of Form 15CB certificates issued by a relatively small group of professionals. The remitted funds were subsequently received by a clustered group of entities, raising concerns over the due diligence carried out before the certificates were issued.
Under Rule 37BB of the Income-tax Rules, 1962, corresponding to Form 146 read with Rule 220 of the Income-tax Rules, 2026, accountants certifying foreign remittances are required to verify their taxability with reference to books of account and other relevant documents.
The Income Tax Department said the nationwide verification exercise, launched on August 18, is focusing on shell entities, the persons behind them and professionals who issued Form 15CB certificates.
The exercise has so far covered around 394 entities, including 117 entities located in land-border states, along with 36 professionals, the department said.
The department has stressed that accountants issuing Form 15CB/Form 146 certificates are expected to exercise due care, diligence and professional judgment. They have been advised to properly examine the underlying transactions and relevant facts before certifying foreign remittances.
“Further investigations are currently underway,” the department said.
The verification exercise is part of the department’s efforts to identify possible irregularities in overseas fund transfers and strengthen compliance in foreign remittance transactions.
