The Income Tax Department has intensified its scrutiny of suspicious foreign remittances and professionals allegedly issuing certificates based on questionable or fabricated documents.
The move is particularly relevant for NRIs who transfer money from India to their overseas accounts after selling property, redeeming investments or receiving other legitimate income.
However, ordinary Gulf NRIs making genuine, documented remittances do not need to panic. The department's current focus is on suspicious transactions, shell entities and professionals facilitating potentially irregular overseas transfers.
According to the CBDT findings reported on August 18, the department has identified several entities that allegedly transferred substantial amounts of foreign currency overseas during the past three years.
The investigation has found:
Several entities allegedly had little or no genuine business activity.
Large overseas payments were made under the guise of freight charges, software imports and consultancy services.
Some entities allegedly used fake charitable donations as part of money-laundering arrangements.
Several establishments were found not to be operating from their registered addresses.
A total of 394 entities and 36 chartered accountant professionals are currently under scrutiny, according to the department's findings reported by Dhanam.
The investigation is significant for NRIs because the system used for certifying overseas remittances can also be misused by entities trying to move money abroad through questionable transactions.
Under the Income Tax Act, 2025, which applies to remittances made from April 1, 2026, the earlier Forms 15CA and 15CB have been replaced by Forms 145 and 146.
Form 145 is the remitter's information and declaration form.
Form 146 is the accountant's certificate corresponding to the earlier Form 15CB.
Form 146 is required in specified cases involving taxable remittances exceeding ₹5 lakh in a tax year.
For NRIs, these requirements can become relevant when money generated or held in India is being transferred overseas.
Form 145 is required for payments to a non-resident or foreign company and must generally be furnished before the remittance is made.
It has four parts:
Part A: For taxable remittances where the amount or aggregate amount during the tax year does not exceed ₹5 lakh.
Part B: For taxable remittances exceeding ₹5 lakh where an Assessing Officer's certificate has been obtained.
Part C: For taxable remittances exceeding ₹5 lakh where a Form 146 certificate from an accountant has been obtained.
Part D: For remittances that are not taxable under the Income Tax Act, subject to specified exceptions.
The form can be submitted online through the Income Tax Department's e-filing portal or using the prescribed offline utility.
Form 146 is the accountant's certificate for a taxable payment to a non-resident or foreign company where the payment or aggregate payments exceed ₹5 lakh during the tax year.
The chartered accountant certifies key aspects of the transaction, including:
Details of the remitter and recipient
Nature and amount of the remittance
Taxability under the Income Tax Act
Taxability under the applicable Double Taxation Avoidance Agreement
Tax deducted at source
Verification of the information submitted
The CA must be registered on the Income Tax e-filing portal and have a valid Digital Signature Certificate to submit Form 146.
NRIs transferring money from India to their Gulf or other overseas accounts should maintain a clear documentary trail showing the source and tax treatment of the funds.
Important documents include:
Property sale agreements and related documents
Bank statements showing the source of funds
Investment and redemption statements
Income-tax returns
TDS and tax-payment records
Details supporting the source of the money
Form 145
Form 146, wherever applicable
The objective is simple: the taxpayer should be able to demonstrate where the money came from and why the overseas transfer is legitimate.
The introduction of Forms 145 and 146 does not by itself impose a new tax on legitimate foreign remittances.
The Income Tax Department has clarified that Forms 145 and 146 replace Forms 15CA and 15CB under the new Income Tax Act, 2025. The basic requirements relating to reporting, CA certification in applicable cases and TDS compliance continue under the new framework.
Forms 15CA and 15CB already submitted for remittances made on or before March 31, 2026 continue to remain valid, subject to the prescribed conditions. Remittances made from April 1, 2026 are governed by the new framework and the corresponding Forms 145 and 146.
An Income Tax notice relating to a foreign remittance should not be ignored.
The taxpayer should:
Check the transaction referred to in the notice.
Gather the relevant bank and tax documents.
Establish the source of the funds.
Provide the requested explanation within the prescribed period.
Seek professional advice where the transaction involves property sales, investments, inheritance or complex tax issues.
A properly documented and legitimate transaction should be easier to explain and substantiate.
The latest scrutiny is primarily a warning against suspicious overseas money transfers and the misuse of professional certification.
For Gulf NRIs, the key takeaway is not to stop legitimate repatriation of money from India, but to ensure that every significant transaction has a clear paper trail.
As the tax department increasingly uses digital systems to cross-check tax and remittance information, casually prepared or unsupported certificates could attract greater scrutiny.
For genuine transactions, proper documentation, accurate Form 145 filing and Form 146 certification where applicable remain the safest approach.
