63,000 Indian Restaurants Under IT Radar: What’s The Truth?

It is already known that several Indian restaurants have been facing the complaints about possible tax ovation, and it has now reached a point where the income tax department has started to crack down on the same.

The Income Tax Department has placed nearly 63,000 restaurants across India under scrutiny as part of a nationwide drive to curb tax evasion in the food and hospitality sector. The action comes after authorities conducted surveys on 62 restaurants across 46 cities in 22 states, uncovering large scale discrepancies in reported sales.

According to preliminary findings, officials detected suppression of sales worth around ₹408 crore. Investigators found that several establishments had allegedly underreported their revenues by manipulating billing systems and financial records.

The department used advanced AI based data analysis to examine transaction patterns from about 1.77 lakh restaurants across the country. During this analysis, authorities identified suspicious practices such as bulk deletion of bills, modification of sales entries, and other digital alterations aimed at hiding the actual turnover of restaurants.

Based on these findings, around 63,000 restaurants have now been flagged for possible tax irregularities. Instead of immediately initiating enforcement action, the department has launched a compliance initiative named SAKSHAM NUDGE.

Under this campaign, identified restaurants are being encouraged to voluntarily review and correct their income tax returns. Officials have asked these establishments to update their filings and disclose accurate sales figures before March 31, 2026. The move is aimed at improving voluntary compliance while reducing tax evasion in the sector.