In a bold move to curb black money and strengthen the formal economy, the Central Board of Direct Taxes (CBDT) has unveiled an aggressive action plan for the fiscal year 2025-26. According to sources, the board has set an ambitious target of unearthing Rs 2.4 lakh crore in undisclosed income-the first time such a massive goal has been officially laid out.
The CBDT's strategy, aimed at plugging systemic loopholes and bringing the informal economy into the mainstream tax net, involves a two-pronged approach combining intrusive and non-intrusive methods.
High-Risk Sector Analysis on the Radar
Under the internal blueprint, the Investigation Wing has been tasked with preparing focused, data-backed reports on select high-risk sectors. Each Directorate General of Income Tax (DGIT) must identify sectors prone to tax evasion-such as manufacturing, services, agriculture, healthcare, mining, liquor trade, hawala operations, and scrap dealing-by May 2025.
The final sector-specific reports, complete with business profiles, financial analyses, and policy recommendations, are expected to be submitted to the Board by February 2026.
Aggressive Search and Seizure Drive
To meet the ambitious target, the CBDT has mandated that at least 60% of the undisclosed income must be uncovered through intrusive methods like searches and raids, while the remaining 40% should be achieved through non-intrusive probes such as data analytics and financial intelligence.
Jurisdiction-specific targets have been set:
- Mumbai: Rs 60,000 crore
- Delhi: Rs 45,000 crore
- Bengaluru: Rs 20,000 crore
- Ahmedabad: Rs 20,000 crore
Officers across jurisdictions have been instructed to conduct at least one major search operation by July 31, and two more between August 2025 and March 2026.
Push for Formalising the Informal Economy
Highlighting the lack of visibility into informal transactions, the CBDT emphasized the urgent need to study and formalize sectors where unreported or underreported activities are rampant.
The proposed sector reports will cover:
- Business and operational profiles
- Key entities and M&A activities
- Sectoral economic contribution
- Financial trends based on advance tax data
- Risk assessment and compliance behavior
- Investigation strategies and policy reform recommendations
Officials have also been directed to prioritize cases where actions could create a cascading impact, sending a strong deterrence signal to the broader economy.
Broader Vision for a Less-Cash Economy
This latest initiative aligns with the government's broader agenda of promoting a less-cash, more formal economy and tackling areas traditionally beyond the tax net. With this concerted push, authorities hope to drive better compliance, boost tax revenues, and strike a decisive blow against the shadow economy.
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