India's tax agency flags over Rs 25,000 crore hidden earnings by restaurants
The income tax department says restaurants may have evaded more than Rs 25,000 crore, based on delivery-app data showing 8,000 outlets with TDS but no tax returns.
The Indian income tax department has uncovered what it estimates to be more than Rs 25,000 crore in tax evasion by restaurants, using four years of data from food-delivery platforms Swiggy and Zomato. The study found that 8,000 eateries had TDS entries—about 0.1 % of each delivery bill—but had not filed income-tax returns, accounting for roughly Rs 7,500 crore of the gap. In the most recent fiscal year, those restaurants generated close to Rs 2,700 crore in sales yet paid only about Rs 25 crore in TDS.
Because TDS is levied solely on delivery orders and dine-in sales—typically three to four times larger—actual earnings are far higher than the TDS figures suggest. Over the 2021-22 to 2024-25 period, the government collected about Rs 75 crore in TDS, while the number of restaurants subject to it rose 65 %. Authorities intend to launch a new enforcement drive, expanding on prior “nudge” campaigns that have had modest effect. Earlier surveys indicated restaurants under-reported income by 30-35 % and concealed cash through employee accounts, prompting letters to over 60,000 establishments.
Why it matters
Hidden tax liabilities from restaurants could cut government revenue and affect fiscal policy.
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