Income Tax Department Launches Nationwide Verification of Restaurants for Tax Evasion

The Income Tax Department has launched a nationwide verification drive targeting restaurants suspected of suppressing their actual turnover to evade taxes. The move comes after investigations into tax evasion patterns in the Food and Beverage (F&B) sector. According to the department, advanced AI-enabled analytics was used to analyse transactional data from around 1.77 lakh restaurants. The analysis found several cases where restaurants allegedly deleted bulk bills or modified records to underreport their actual sales. Based on the findings, the department conducted a nationwide survey on March 8, 2026, across 62 restaurants in 46 cities across 22 states. Preliminary results suggest that sales suppression worth around ₹408 crore may have occurred. To encourage voluntary compliance, the department has launched the “SAKSHAM NUDGE” campaign, under which emails and messages will be sent to identified restaurants advising them to correct their tax filings. Restaurant owners have been asked to file updated income tax returns under Section 139(8A) before March 31, 2026, if any discrepancies are found in their earlier declarations.