A recent nationwide survey by the Income Tax Department revealed that 62 restaurants across 46 cities in 22 states had suppressed sales amounting to approximately Rs 408 crore. The investigation, focused on tax evasion patterns in the Food and Beverage sector, was conducted in November 2025. It was discovered that certain restaurants engaged in activities like deleting bulk bills and making modifications to underreport actual sales.
The Finance Ministry stated that advanced analytics using AI-enabled tools were employed to analyze transactional data from about 1.77 lakh restaurants in the F&B sector. By comparing this data with the turnover declared in their Income Tax Returns, it was evident that there was widespread under-reporting of income. Instances were found where recorded sales did not align with financial accounts or tax filings, and some transactions were excluded from reported sales.
On 8th March 2026, a nationwide survey was carried out on the identified 62 restaurants, uncovering the suppression of sales totaling around Rs 408 crore. Investigations are currently ongoing in this matter. The Income Tax Department emphasized the importance of voluntary compliance and a trust-based approach, launching the SAKSHAM NUDGE campaign to assist taxpayers in rectifying errors.
Taxpayers are being encouraged to file updated returns under Section 139(8A) of the Income Tax Act. In the initial phase, emails and messages will be sent to 63,000 identified restaurants, urging them to update their returns before March 31, 2026. A comprehensive assessment of tax evasion will be possible once the investigation concludes.
