On 9th March, the Income Tax Department announced that it carried out a nationwide verification exercise targeting tax evasion in the food and beverage sector. According to the press release issued by the department, the survey was conducted on 8th March 2026 across multiple cities. So far, it has detected tax fraud of restaurant sales amounting to around Rs 408 crore. The action came as part of the department’s broader effort to identify discrepancies between actual transactions and income reported in tax filings.
KIND ATTENTION TAXPAYERS!
— Income Tax India (@IncomeTaxIndia) March 9, 2026
✅Income tax Department carries out nation-wide verification exercise on Restaurants suppressing turnover
✅The Department commences SAKSHAM NUDGE campaign to guide and advise taxpayers to correct their mistakes.
✅In the first phase, emails and… pic.twitter.com/MRt0OM1iLu
AI analysis flags large-scale under-reporting
According to the department, in November 2025 it launched an investigation into suspected tax evasion patterns within the restaurant industry. During the probe, officials found instances where restaurants allegedly deleted bulk billing entries or modified transaction records to avoid taxes by reducing the actual sales reflected in financial statements.
The department analysed transactional data from around 1.77 lakh restaurants across the country to assess the scale of the issue. It used AI-enabled analytical tools to compare recorded billing data with turnover declared in Income Tax Returns.
The analysis of the data revealed widespread discrepancies. In several cases, sales recorded in billing systems were not fully reflected in financial accounts or tax filings. Certain transactions were also found to have been excluded from reported sales, which indicated deliberate under-reporting of income.
Nationwide survey across 22 states
Following the data analysis, the Income Tax Department carried out a nationwide survey on 8th March which covered 62 restaurants across 46 cities in 22 states. Initial findings from the survey indicate suppression of sales amounting to roughly Rs 408 crore. Further investigation into the matter is underway.
SAKSHAM NUDGE campaign launched
As the department continues enforcement action, it has also emphasised voluntary compliance and a trust-based approach. As part of the effort, it has launched the SAKSHAM NUDGE campaign to encourage taxpayers to correct discrepancies in their filings.
According to the press release, the department will send emails and messages to around 63,000 identified restaurants under the first phase of the campaign. They will be advised to update their income tax returns before 31st March 2026 by using the provision available under Section 139(8A) of the Income Tax Act.
According to the officials, this initiative is aimed at promoting transparency while allowing businesses to rectify mistakes without prolonged enforcement proceedings.
