CBDT Detects Turnover Suppression by Restaurants

Press Release, dated 09-03-2026

The Income Tax Department has conducted a nationwide verification exercise to detect tax evasion in the food and beverage (F&B) sector, particularly among restaurants. The exercise involved the use of AI-enabled analytical tools to analyse transactional data and identify discrepancies in reported income.

1. AI-Based Data Analysis of Restaurant Transactions

As part of the initiative, the Department carried out advanced analytics of transactional data from approximately 1.77 lakh restaurants across the country.

This data was compared with the turnover declared in the respective Income Tax Returns (ITRs) filed by these establishments. The analysis revealed instances of large-scale under-reporting of income.

2. Findings of the Verification Exercise

During the examination, it was observed that some restaurants were engaging in practices such as:

• Deletion of bulk bills
• Modification of transaction records

These practices were allegedly used to suppress actual sales figures and reduce the reported taxable income.

3. Nationwide Survey Conducted

Following the analytical findings, the Department conducted a nationwide survey covering 62 restaurants across 46 cities in 22 States.

Preliminary findings from the survey indicate suppression of sales amounting to approximately ₹408 crore.

4. Launch of SAKSHAM NUDGE Campaign

In response to the findings, the Income Tax Department has launched the SAKSHAM NUDGE campaign, aimed at guiding taxpayers and encouraging voluntary compliance.

The campaign seeks to:

• Advise taxpayers to review their reported income
• Encourage correction of discrepancies in tax filings
• Promote voluntary disclosure and compliance

5. Opportunity to File Updated Returns

Restaurants identified during the exercise are encouraged to file updated returns under Section 139(8A) of the Income Tax Act to correct previously filed returns.

As part of the first phase of the campaign, the Department will send emails and messages to approximately 63,000 identified restaurants, requesting them to update their returns.

Taxpayers have been advised to make necessary corrections before 31 March 2026.

6. Objective of the Initiative

The exercise reflects the Department’s increasing use of data analytics and AI-driven tools to detect tax evasion and improve compliance. The SAKSHAM NUDGE initiative also emphasises voluntary compliance and corrective action before enforcement measures are initiated.

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