Overseas remittances in focus: I-T uncovers Rs 1.29 lakh crore trail – money sent to China, UAE & more
Income Tax crackdown: The Income Tax Department has uncovered a large overseas remittance network that involves as many as 6,422 new entities. These companies collectively transferred Rs 1.29 lakh crore abroad. The findings have already led to action against 394 firms, while a broader set of companies and individuals is now under scrutiny, according to people familiar with the investigation.The probe comes as the rupee remains under significant pressure. The Reserve Bank of India has been regularly selling dollars in the foreign exchange market to contain volatility and prevent sharp, disorderly movements in the currency.
What I-T department crackdown found
Investigators found that a significant share of the funds was routed to a small group of overseas destinations. Singapore, the UAE, Hong Kong, Mauritius and China together received 72.3% of the total remittances. Singapore was the biggest recipient, with Rs 41,885 crore transferred there, followed by the UAE at Rs 18,331 crore and Hong Kong at Rs 18,064 crore.“This is a massive trail and a large-scale operation. Probe is still on and real modus operandi can emerge only after a few days,” a senior official told ET. Senior officials in the department of revenue are also closely monitoring the investigation.The tax authorities have also found a notable concentration of remittances among entities using foreign addresses. Eighty-three such entities together accounted for Rs 36,175 crore of the transfers, prompting investigators to examine their ownership structures, business operations and the transactions underlying the remittances more closely.The sharp increase in overseas remittances has also raised concerns about the pace at which funds are leaving the country. In the first half of FY26, Rs 43,048 crore was sent abroad, an amount already equal to 78% of the total remitted during the whole of FY25.The investigation has once again drawn attention to the use of corporate structures and cross-border transactions to transfer money out of India, particularly at a time when the central bank is actively managing dollar liquidity and seeking to contain volatility in the rupee, an official said.Investigators are now looking into where the funds originated, the nature and purpose of the transactions and the beneficiaries receiving the money overseas. The department said in a press statement issued on Tuesday that action had already been taken against 394 firms.However, the investigation remains ongoing. Several other companies and individuals are believed to be under examination, with additional searches and enforcement measures expected as the probe progresses.
