I-T Department uncovers ₹408 crore sales underreporting by restaurants across India

I-T department uncovers ₹408 crore in hidden restaurant sales through AI analysis, revealing extensive income under-reporting nationwide.

The Income tax Department has found a preliminary ₹408 crore worth of sales being hidden by restaurants across the country through the deletion of bills and other means to modify the actual sales figures. The investigation began in November 2025.

“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 Department said in a release on Monday (March 9, 2026).

“The data was compared with the turnover declared in their Income Tax Returns,” it added. “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.”

Following these findings, on March 8, the Department conducted a nationwide survey on 62 restaurants across 46 cities in 22 States.

“On a preliminary basis, the exercise revealed suppression of sales amounting to around ₹408 crore,” the release said. “Investigations in this regard are underway.”

The locations covered include Shimla, Murthal, Guwahati, Delhi, Mumbai, Chennai, Kolkata, Siliguri, Godhra, Ahmedabad, Bengaluru, Kollam, Kochi, Madurai, Coimbatore, Raipur, Bhopal, Indore, Ajmer, Jaipur, Gurugram, Chandigarh, Ludhiana, Koderma, Patna, Cuttack, Puri, etc.