I-T unearths Rs 1.29 lakh cr foreign remittances

NEW DELHI: The income tax department has uncovered a massive overseas remittance trail involving 6,422 newly identified entities that collectively sent Rs 1.29 lakh crore abroad, triggering action against 394 firms and putting a wider network of companies and individuals under the scanner, people aware of the probe said.

The development comes at a time when the rupee remains under severe pressure, with the Reserve Bank of India having to regularly intervene in the foreign exchange market through dollar sales to contain volatility and prevent disorderly moves in the currency.

The tax probe has found that a substantial portion of the money moved to a handful of overseas destinations. Singapore, the UAE, Hong Kong, Mauritius and China together accounted for 72.3% of the total remittances. Singapore emerged as the largest destination, receiving Rs 41,885 crore while Rs 18,331 crore was remitted to the UAE and Rs 18,064 crore to Hong Kong.

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“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, without divulging any further details. The probe is also being closely monitored by top officials from the department of revenue.

The investigation has also thrown up a striking concentration of flows among entities with foreign addresses. A total of 83 such entities accounted for Rs 36,175 crore in remittances, prompting closer scrutiny of their ownership, business activity and the underlying transactions.

The pace of outward flows has added to the concerns. Rs 43,048 crore was remitted overseas in the first half of FY26, already equivalent to 78% of the full-year figure for FY25.

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The probe has brought renewed focus on how corporate structures and cross-border transactions are being used to move funds out of India at a time when the central bank is actively managing dollar liquidity and currency volatility, an official added.

Investigators are now examining the source of funds, the nature of the transactions and the beneficiaries behind the overseas transfers. The department has already acted against 394 firms, the department said in a press statement issued Tuesday.

But the investigation is far from over. More companies and individuals are understood to be under scrutiny, with further searches and enforcement action expected.