- Gujarat police registered a case involving eight hundred four crore rupees in alleged illicit overseas payments.
- The investigation focuses on four chartered accountants accused of issuing improper tax certificates without review.
- Authorities are invoking charges including forgery and criminal conspiracy under the Bharatiya Nyaya Sanhita.
Police in Gujarat registered a criminal case against nine people, including four individuals identified as chartered accountants, over allegations that improperly issued tax certificates helped facilitate overseas payments worth approximately ₹804.30 crore.
Gandhidham “A” Division police acted on a complaint from an Income Tax Inspector representing the Income Tax Investigation Wing, Ahmedabad. A published report dated August 23, 2026, described the case and the allegations against the people named in the first information report.
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The inquiry centers on certificates allegedly issued without adequate examination of the transactions behind them. As of August 2026, the accused remain accused, and guilt has not been established.
The alleged scheme has implications beyond the professionals named in the case. It puts attention on whether companies and individuals sending money abroad can show the transaction’s real purpose, tax treatment and supporting records.
Investigators have linked the questioned certificates to payments involving seven companies. They allege that accountants did not sufficiently review books of account, contracts and other documents, and that some did not deal directly with the companies’ actual directors or owners.
Authorities also allege that middlemen participated in the arrangements and that unaccounted commissions changed hands. Police have invoked offences including cheating, forgery, criminal breach of trust and criminal conspiracy under the Bharatiya Nyaya Sanhita, or BNS.
The certificate belongs to a wider withholding-tax process
India’s rules for payments to non-residents combine tax deduction and reporting duties. Section 195 of the Income-tax Act, 1961 may require a person making a payment to deduct tax when the amount is chargeable to tax in India.
Section 195(6) and Rule 37BB of the Income-tax Rules, 1962 separately govern reporting for payments to non-residents. Depending on the payment’s nature and amount, the remitter may need to file Form 15CA and obtain an accountant’s certificate in Form 15CB.
The process is not identical for every transfer. The relevant steps can depend on the payment’s character, its amount, whether Indian tax applies and whether an Assessing Officer has issued a certificate or order.
A bank may accept documents for processing. That acceptance does not settle the final income-tax consequences.
The ₹5 lakh threshold applies within a taxability test
The often-cited ₹5 lakh figure does not mean that every payment above that amount automatically requires an accountant’s certificate. The threshold operates within the Rule 37BB framework and depends on the payment’s tax status.
| Circumstance | Compliance point described in the material |
|---|---|
| Payment to a non-resident is chargeable to tax | Withholding and reporting obligations may apply |
| Aggregate payment during the financial year exceeds ₹5 lakh | The prescribed accountant’s certificate may be required |
| Payment is not chargeable to tax or falls within a specified category | Different reporting rules may apply |
| Assessing Officer issues a certificate or order | That document may alter the applicable procedure |
Where a payment to a non-resident is chargeable to tax under the Income-tax Act and aggregate payments during the financial year exceed ₹5 lakh, Rule 37BB may require the accountant’s certificate. The remitter may instead obtain the relevant certificate or order from the Assessing Officer.
The amount alone does not decide the filing route. Taxability does.
The accountant must examine the transaction behind the transfer
The professional review involves more than recording how much money will leave India. An accountant generally examines the nature of the remittance, the applicable Income-tax Act provisions and any potential withholding-tax liability.
A Double Taxation Avoidance Agreement may affect the result. Depending on the circumstances, the working file may include contracts, invoices, agreements, tax-residency information and records showing the actual character of the transaction.
Those records form the factual foundation for the tax analysis. The Gujarat allegations concern certificates that investigators say did not adequately reflect that underlying review.
The Income Tax Department had earlier carried out search and survey operations at premises associated with accountants. Police have also alleged that the certification arrangements involved intermediaries and payments that were not accounted for.
Professionals can face exposure beyond an ordinary tax dispute if authorities believe a certificate was knowingly false or connected to a fraudulent arrangement. The current allegations include forgery, cheating and conspiracy, but the criminal process still requires investigation and proof.
A large overseas payment needs a documented purpose and tax trail
Before sending a substantial amount outside India, a remitter should be able to assemble records showing:
- Who is receiving the money and why.
- The legal nature of the payment.
- The agreement, invoice or other document supporting it.
- Whether the payment is chargeable to Indian tax.
- Whether tax must be withheld.
- Whether a tax treaty affects the applicable rate.
- Which part of the Rule 37BB/Form 15CA procedure applies.
The tax position should be considered before the transfer, not after the commercial transaction has been completed. The professional issuing the certificate should have access to the relevant agreements and supporting material.
Direct contact can also matter. Businesses relying on agents or intermediaries should use caution when the certifying professional has little or no interaction with the company’s directors or owners.
Different personal and commercial transfers can receive different tax treatment
The case does not make ordinary overseas transfers illegal, and it does not mean that every person sending money abroad will face a criminal inquiry. The relevant tax analysis depends on what the payment represents.
NRIs may transfer funds for property purchases, professional fees, royalties, investments, business payments, interest, family transactions or repatriation of funds. These categories do not necessarily receive the same treatment under Indian tax law.
A bank’s acceptance of paperwork does not determine whether the underlying amount was taxable or whether tax should have been withheld. The remitter remains responsible for maintaining records that match the genuine purpose of the payment.
The reported ₹804.30 crore measures alleged transfers, not established tax loss
The reported ₹804.30 crore refers to the overseas transactions or financial benefits allegedly facilitated through the questioned certificates. It should not automatically be described as tax lost by the Indian government.
The eventual revenue implication will depend on the taxability of the underlying payments, the withholding-tax provisions that apply, any treaty benefits and the facts established during the investigation.
That distinction separates the value of the alleged transfers from the amount, if any, that authorities ultimately determine was unpaid or improperly withheld.
Police are tracing beneficiaries, directors and alleged handlers
The investigation remains underway. Police are seeking to establish the ultimate beneficiaries and handlers connected with the payments, while examining the extent of the alleged illicit gains.
Investigators are also working to identify company directors and other people who may have handled the money. The criminal and tax consequences will depend on the evidence gathered and subsequent judicial proceedings.
An FIR records allegations that require investigation and proof. Registration of the case is not a finding that the accused persons are guilty.
This article is for informational purposes only and does not constitute tax advice. Consult a qualified tax professional or CPA about your specific situation.
