Dozens of senior executives drawing annual salaries of more than Rs 50 lakh are under the scanner for allegedly underreporting their income and claiming unwarranted exemptions.
Tax authorities have sent notices to such individuals, including chief executives and managing directors of multinational companies, urging them to rectify the anomalies before penalties are imposed, said officials.
The Income Tax Department has sent notices to the executives for failing to declare foreign assets and overseas income, underreporting stock-linked incentives and exaggerating perquisites such as housing and travel allowances to suppress their taxable income.
Notices have been sent to executives from sectors such as hospitality, IT, fast-moving consumer goods, engineering and construction, and automobiles, the officials said, adding that business leaders from several startups have also come on the tax department’s radar.
Many of these taxpayers, they said, had claimed exemptions by citing fraudulent donations to religious institutions, charitable trusts or educational institutions.
“We have over two dozen cases where executives invested in expensive properties, more than 50 who received hefty secondary salary payments from foreign clients in cryptocurrencies and cases involving huge donations to political parties that are neither recognised nor contesting elections,” said a senior official, who did not wish to be identified.
The discrepancies were unearthed during intensified reviews of income tax returns (ITRs) of high-income individuals in the current assessment cycle. As part of its ‘Non-intrusive Usage of Data to Guide and Enable (Nudge) campaign, the department has asked many executives to file revised ITRs.
“Many taxpayers felt they could get away with foreign purchases and assets. However, with the large volume of financial data received by the government through automated exchange programmes and PAN (Permanent Account Number)-linked tracking, it is increasingly difficult to underreport foreign transactions,” the official said.
Undisclosed foreign assets included properties purchased in the names of minor children and spouses, foreign stocks, income paid in cryptocurrencies and deposits in overseas accounts.
“An interesting pattern that emerged was that individuals sharing the same chartered accountants were donating to the same institutions,” the official said, adding that action is being initiated separately against such chartered accountants.
The crackdown aligns with the government’s broader push for tighter compliance and data-driven enforcement. In recent years, the department has leveraged artificial intelligence-based analytics to flag inconsistencies between declared income, tax deducted at source records and third-party financial data.
In this financial year, more than 2.1 million taxpayers have updated their ITRs for assessment years 2021-22 to 2024-25 and paid additional taxes of over Rs 2,500 crore. Besides, more than 1.5 million ITRs have already been revised for the current assessment year.
In the budget for 2026-27, the Centre announced a one-time, six-month window for the declaration of foreign assets to provide relief to taxpayers, including professionals with undisclosed employee stock option plans and students who retained funds in overseas accounts.
Source Name : Economic Times