ITD carries out Nation-wide Verification Exercise on Restaurants

• 10 Mar 2026
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In November 2025, the Income Tax Department (ITD) conducted an investigation into tax evasion patterns within the Food and Beverage sector. During this investigation, it was discovered by the ITD that several restaurants were involved in deleting bulk bills and making modifications. They did it so they could suppress their actual sales figures. Advanced analytics of transactional data from approximately 177,000 restaurants in the F&B sector was performed using artificial intelligence enabled analytical tools.

This data was compared to the turnover declared in Income Tax Returns of these restaurants. It was revealed by the analysis that there happened to be a significant under reporting of income. In some instances, recorded sales were not fully reflected in financial accounts or tax filings and certain transactions were not included in the reported sales.

On 8 March 2026, a nationwide survey was conducted. It involved a total of 62 restaurants across 46 cities in 22 States. The preliminary findings of this exercise indicated a suppression of sales amounting to about Rs. 408 crore. Investigations are ongoing in this matter. The ITD continues to emphasize the importance of voluntary compliance as well as a trust based approach. 

In order to guide and advise taxpayers on correcting their mistakes, the Department has launched the SAKSHAM NUDGE campaign. Taxpayers are encouraged to file updated returns u/s 139 (8A) of the Income Tax Act 1969. In the first phase of this campaign, emails and messages will be sent to 63,000 identified restaurants to urge them to update their returns before 31 March 2026.

Source: Press Information Bureau (PIB)