Income Tax Department Uncovers Rs 408 Crore Sales Suppression in Nationwide Restaurant Survey
The Income Tax (I-T) department conducted a comprehensive nationwide survey on Sunday, targeting 62 restaurants spread across 46 cities in 22 states. According to an official release issued by the Central Board of Direct Taxes (CBDT) on Tuesday, this extensive exercise uncovered significant suppression of sales, amounting to approximately Rs 408 crore. Among the establishments surveyed, three were located in Ahmedabad and one in Surat, as confirmed by I-T sources.
Investigation into Tax Evasion Patterns in the F&B Sector
The release, signed by V Rajitha, Commissioner of Income Tax (Media & Technical Policy) and official spokesperson for the CBDT, detailed that the I-T department initiated an investigation into tax evasion patterns within the food and beverage (F&B) sector back in November 2025. During this investigation, it was discovered that numerous restaurants were actively engaged in practices such as deleting bulk bills and making other modifications to conceal their actual sales figures.
To identify these discrepancies, the department employed advanced analytics on transactional data from approximately 1.77 lakh restaurants in the F&B sector. This analysis was conducted using sophisticated AI-enabled analytical tools, which allowed for a thorough examination of financial records.
Large-Scale Under-Reporting of Income Revealed
The data collected through these AI tools was meticulously compared with the turnover declared in the income tax returns filed by the restaurants. This comparison revealed widespread under-reporting of income across the sector. In many instances, recorded sales were not fully reflected in the financial accounts or tax filings of the establishments. Additionally, certain transactions were deliberately excluded from the reported sales, further contributing to the suppression of income.
The findings highlight a systematic effort by some restaurants to evade taxes by manipulating their financial records, leading to substantial revenue losses for the government.
Saksham Nudge Campaign Launched to Guide Taxpayers
In response to these findings, the I-T department has launched the Saksham Nudge campaign. This initiative aims to guide and advise taxpayers to correct their mistakes voluntarily. Officials stated that taxpayers are encouraged to file updated returns under Section 139(8A) of the Income Tax Act to rectify any discrepancies in their filings.
As part of the first phase of this campaign, emails and messages will be sent to 63,000 identified restaurants, urging them to update their returns before the deadline of March 31, 2026. This proactive approach is designed to promote compliance and ensure that all establishments adhere to tax regulations, thereby enhancing transparency and accountability in the F&B sector.
The nationwide survey underscores the I-T department's commitment to combating tax evasion and fostering a culture of voluntary compliance among businesses. By leveraging technology and data analytics, the department aims to streamline tax administration and recover lost revenues effectively.
