NEW DELHI: The Income Tax Department has launched a nationwide verification campaign targeting suspicious foreign remittances. The action follows the identification of several entities that allegedly transferred large sums abroad despite reporting minimal business and financial activities. The operation was initiated on August 18.
According to a statement shared by the department on social media platform X, the campaign relies on data analytics and ground-level intelligence. The investigation covers the entities remitting funds overseas, individuals associated with them, and professionals who issued certificates for these transactions.
Departmental probes revealed that certain entities remitted substantial foreign currency over the last three years while failing to file income tax returns or reporting very low turnover. Authorities noted that despite limited business operations, large sums were sent abroad under reasons such as freight, software imports, and consulting services, which did not align with the actual operations of these organizations.
Ground verification further established that some entities were not operating from their declared addresses. The department added that this action links to an ongoing investigation into bogus charitable trusts accused of providing entries in exchange for fake donations, which helped expose the network of entities transferring funds overseas.
The department also focused on professionals issuing Form 15CB certificates for foreign remittances, noting that a limited number of professionals issued a high volume of these certificates. Under the tax framework, Form 15CB requires accountants to verify tax liability and supporting documentation. Questions have been raised regarding whether due diligence was exercised before issuing these certificates, a process governed by Form 146 and Rule 220 under the new Income Tax framework.
The verification drive covers approximately 394 entities, including 117 located in border states, along with 36 professionals whose roles are under scrutiny. The department has advised professionals to exercise due care, thorough verification, and professional responsibility when certifying foreign remittances. Further investigation remains underway.
