I-T Dept Probes Shell Firms Tied To Big Business Houses: Report

The income-tax department is investigating 394 companies and 36 professionals for sending large sums of money abroad that do not match their declared financial profiles, according to a Moneycontrol report. A small share of these entities, roughly 5%, are reportedly linked to major Indian business houses, though the probe covers the full set of 394 companies.

Most of these entities are shell companies based in Mauritius, UAE and Singapore. Together, they sent over ₹30,000 crore abroad in the first half of FY26, the report said.

The income-tax department is working to trace where these remittances ultimately land and is examining the ownership structure behind each entity. A source cited in the report said the verification exercise is meant to flag cases that need closer scrutiny, adding that any discrepancies found in documentation or the underlying transaction would trigger a more detailed review. The source clarified that the amount remitted alone is not the central concern; the nature and purpose behind each transaction matters just as much.

What The Probe Has Found So Far

Income-tax department data shows more than ₹1 lakh crore was remitted in FY26 to over 5,000 entities based overseas. In a statement issued on August 18, the department said it had identified several entities that sent large sums of foreign exchange over the past three years, based on ground intelligence and analysis of outward remittance data.

A search operation carried out this month uncovered a nationwide network of entities involved in these remittances. The department said the network included a group of fictitious charitable trusts that allegedly issued entries against bogus donations or contributions.

Initial verification showed that many of the entities sending money abroad had either not filed tax returns at all or had reported very small turnovers in their filings. The department also found that the stated reasons for the remittances, such as payments for freight, software imports and consulting services, did not match the actual business activities of these entities. Ground-level checks further revealed that several entities were not even functioning from the addresses they had declared.

Experts cited in the report said the department is now likely to examine the broader financial affairs of the identified entities and individuals, including a closer look at the source and stated purpose behind their foreign remittances.