Income tax is checking 394 firms that sent large sums abroad on tiny reported turnovers

The Income Tax Department launched a nationwide field verification on Tuesday against entities it says sent large amounts of money out of India over the last three years. The Central Board of Direct Taxes put the first slice at about 394 entities, including 117 in land-border states, and 36 professionals. Some of the entities were not filing returns. The ones that were had turnovers that, in the Board's words, had no apparent correlation with the sums going abroad.

The stated purposes look ordinary on a form: freight, software imports, consulting. Investigators say the amounts did not match the businesses, and that several firms were not even operating from the addresses they had declared. The exercise also covers fictitious charitable trusts and the chartered accountants who issued Form 15CB certificates, the document that is supposed to confirm a foreign remittance is in order before the bank lets it through.

The Economic Times, citing people aware of the probe, has put a much larger number on the table: 6,422 newly identified entities that together remitted ₹1.29 lakh crore. Singapore, the UAE, Hong Kong, Mauritius and China accounted for 72.3 percent of that total, with Singapore alone at ₹41,885 crore. Eighty-three entities with foreign addresses accounted for ₹36,175 crore. The paper also said ₹43,048 crore went out in the first half of FY26, already 78 percent of the full-year figure for FY25. A senior official told ET the trail is large and that the real modus operandi will take a few more days to emerge. The department of revenue is monitoring the probe. Action against 394 firms has already been recorded.

This lands while the rupee is still under pressure and the Reserve Bank is selling dollars to keep the moves orderly. I am not going to pretend every remittance in that pile is theft. Some of it will turn out to be messy bookkeeping. But a system that lets firms with no real address and no real turnover buy software and consulting from Singapore at this scale is a hole in the capital account, and holes like that show up in the currency whether or not anyone intended them to.

More searches are expected. The official line is that the masterminds are still being identified. Watch the Form 15CB names as much as the company names, because a remittance this size does not leave the country without a signature.