The Income Tax Department is investigating tax evasion by six companies that offer foreign tour packages. These companies are being looked into for various allegations, including under-reporting income, not deducting the prescribed tax (TDS), and potentially being involved in transferring money abroad through unofficial means like a hawala racket.
The Income Tax Department reportedly sent show cause notices to these companies between June and July. The investigation revealed instances of gross underreporting of income and the use of fake names, addresses, and identities for booking tour packages. There were also cases where tour packages were booked in the name of one person for multiple quarters, which were later identified as fake upon closer examination. The tax evasion instances are said to have occurred from the financial year 2019-2020 onwards, and the total tax evasion amount from all six operators could be around ₹600 crore.
One of the allegations is that these companies were booking expensive tour packages in the names of individuals who couldn't realistically afford them, using fake identities. Additionally, these operators were not deducting the required 5% Tax Deducted at Source (TDS) for the tour packages, which is mandatory under tax regulations.
This situation highlights potential financial irregularities and tax evasion in the travel industry. Investigations and actions by tax authorities aim to ensure compliance with tax laws and prevent such instances of evasion and fraud.
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