Outward remittances over ₹6 lakh are subject to scrutiny by the Income Tax Department.

The Central Board of Direct Taxes (CBDT) has initiated a thorough examination and verification of high-value outward remittances exceeding ₹6 lakh to uncover discrepancies and potential misuse. This action follows the discovery of cases where foreign remittances and expenditures did not match the income declared by individuals, along with lapses in tax collection at source (TCS). 

The CBDT has instructed field formations to begin verifying and scrutinizing Form 15CC— a quarterly disclosure statement of outward remittances submitted by authorized dealers. Data from Form 15CC, collected since 2016, will now be available for analysis. A senior official revealed that this comprehensive review, recommended last year, will soon be available for the first time to field formations.

This initiative aims to identify undeclared income and prevent tax evasion while ensuring legitimate remittances are facilitated. The CBDT plans to create a list of high-risk cases based on data from 2020-21 onward and has directed field formations to establish detailed procedures for detecting these cases. The deadline for submitting this list is September 30, with the government setting December 31 as the deadline for issuing notices to those with undeclared income.

For example, in one case, an individual with a declared annual income of ₹5 lakh was found to have sent ₹15 lakh abroad over the past three years using multiple dealers to avoid mandatory TCS and escape the tax net. Under the Liberalised Remittance Scheme (LRS), the government collects a 20% TCS on foreign remittances above ₹7 lakh, except for medical and education expenses. Form 15CC allows certain exemptions, but officials have identified potential misuse of these exemptions.

To address this, the CBDT has asked banks to report forex spends separately from credit card expenditures, even if TCS is not collected. This data will be included in annual income statements for tax assessments. Additionally, the government had increased TCS on foreign remittances under LRS to 20% from 5% starting October 1, 2023, and initially included international credit card payments in LRS, but this was later rolled back following widespread criticism.