- Income Tax Department found Rs 408 crore sales suppression in 62 restaurants nationwide
- Survey covered 62 restaurants in 46 cities across 22 states on March 8, 2026
- AI tools analyzed data from 1.77 lakh restaurants revealing large-scale income under-reporting
The Income Tax Department has uncovered suppression of restaurant sales worth around Rs 408 crore following a nationwide investigation.
According to an official statement issued on Monday, the department carried out a survey on March 8, covering 62 restaurants across 46 cities in 22 states as part of its ongoing investigation into tax evasion patterns in the food and beverage (F&B) sector.
“On March 8, 2026, a nationwide survey was conducted on 62 restaurants across 46 cities in 22 States. On a preliminary basis, the exercise revealed suppression of sales amounting to around Rs. 408 crore. Investigations in this regard are underway,” the department said in a press release.
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
Also Read: Cooking The Books? Restaurants Under IT Dept's Scanner for Alleged Rs 70,000-Crore Tax Evasion
The action followed an earlier investigation in November 2025, during which authorities found evidence that some restaurants manipulated billing records to reduce their reported turnover. The department said several establishments were deleting bulk bills and making other modifications in their systems to conceal actual sales figures.
“Advanced analytics of transactional data from about 1.77 lakh restaurants in the F&B sector was carried out using AI-enabled analytical tools. The data was compared with the turnover declared in their Income Tax Returns. The analysis revealed large-scale under-reporting of income. In some cases, recorded sales were not fully reflected in financial accounts or tax filings, and certain transactions were excluded from reported sales,” reads the press release.
Alongside enforcement measures, the Income Tax Department said it remains focused on promoting voluntary compliance through what it described as a “trust-based approach”.
To support this effort, the department has launched the SAKSHAM NUDGE campaign. It is aimed at encouraging taxpayers to rectify discrepancies in their filings. Under the first phase of the initiative, emails and messages will be sent to around 63,000 restaurants identified during the data analysis exercise.
These establishments will be asked to review and update their tax returns before March 31, 2026, by filing revised returns under Section 139(8A) of the Income Tax Act.
Also Read: Meesho Gets Income Tax Order With Rs 1,500 Crore Demand For AY24
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