Restaurants Under Fire: Income-Tax Department Uncovers Rs 408 Crore Sales Suppression

The Income-Tax Department detected under-reporting of sales worth Rs 408 crore from restaurants nationwide, as revealed by a survey across 62 outlets in 46 cities. They are urging 63,000 restaurants to update their income tax returns to avoid penalties. Advanced analytics identified significant income discrepancies.

The Income-Tax Department has discovered a massive instance of sales under-reporting totaling Rs 408 crore following a nationwide survey of restaurants accused of tax evasion. The Central Board of Direct Taxes (CBDT) disclosed these findings on Monday.

Officials conducted the survey by visiting 62 restaurant locations across 46 cities within 22 states, and the preliminary results indicate significant suppression of sales figures. The department is now prompting a substantial 63,000 restaurants to revise their income tax returns (ITRs) by March 31.

This investigation, beginning in November 2025, involved advanced analytics and AI tools to analyze transactional data from approximately 1.77 lakh restaurants. This analysis uncovered discrepancies between reported turnover and actual sales, with some outlets failing to reflect accurate figures in their financial accounts and tax filings.

(With inputs from agencies.)