The Income Tax Department has intensified scrutiny of overseas money transfers. Officials are examining 394 entities where remittances appear inconsistent with declared income or turnover. Even genuine payments can attract attention if records are incomplete, making documentation vital for individuals and businesses sending funds abroad.
From April 1, 2026, new forms have replaced earlier ones. Form 146 now substitutes Form 15CB and Form 145 replaces Form 15CA. These require detailed information on the nature and purpose of remittances. Authorities are focusing on cases where taxpayers have not filed returns, where turnover is negligible compared to large transfers, or where payment descriptions are vague. Incorrect purpose codes and missing tax deduction details also raise suspicion.
Experts advise maintaining strong documentation. Parag Jain of 1 Finance notes that even legitimate software licence purchases can be flagged if turnover does not match remittance size. Chandni Anandan of ClearTax stresses that clear banking trails and gift deeds help close scrutiny quickly. Nishant Shanker of Navraj Global Advisors adds that chartered accountants must verify contracts, Tax Residency Certificates and tax positions before certifying remittances.
Documents to keep ready include invoices, contracts, TRCs, Form A2, correct purpose codes and self declarations under the Liberalised Remittance Scheme. Proper records ensure smooth compliance and protect taxpayers from penalties, interest or deeper investigation.
