Dozens of high-earning executives, drawing annual salaries exceeding Rs 50 lakh, are facing scrutiny from the Income Tax Department for allegedly underreporting income and claiming unwarranted exemptions. Notices have been issued to top-level executives, including chief executives and managing directors of multinational companies, urging them to rectify discrepancies before penalties are imposed.
Officials said the notices focus on undeclared foreign assets, overseas income, underreported stock-linked incentives and inflated perquisites such as housing and travel allowances aimed at reducing taxable income.
Executives from sectors including IT, hospitality, fast-moving consumer goods, engineering, construction, automobiles and startups have come under the department’s radar. Many had claimed exemptions through fraudulent donations to religious institutions, charitable trusts, or educational institutions.
"We have over two dozen cases involving expensive property investments, more than 50 cases with secondary salary payments from foreign clients in cryptocurrencies and donations to unrecognised political parties," said a senior official.
Automated Data Analytics Aid Tax Enforcement
The discrepancies were discovered during intensified reviews of high-income individuals' tax returns in the current assessment cycle. Under the 'Non-intrusive Usage of Data to Guide and Enable (Nudge)' campaign, several executives have been asked to file revised ITRs.
"With data from automated exchange programmes and PAN-linked tracking, it’s increasingly difficult to underreport foreign transactions," the official added.
Patterns in Chartered Accountant Usage
Some executives reportedly used the same Chartered Accountants to channel donations to similar institutions, prompting separate action against those CAs. Undisclosed foreign assets included properties in the names of minors and spouses, overseas stocks, cryptocurrency payments and deposits in foreign accounts.
Government Push for Compliance
The crackdown aligns with the government’s broader push for tighter compliance and data-driven enforcement. AI-based analytics are increasingly used to flag inconsistencies between declared income, tax deducted at source, and third-party financial data.
In the current financial year, over 2.1 million taxpayers revised ITRs for assessment years 2021-22 to 2024-25, paying additional taxes exceeding Rs 2,500 crore. More than 1.5 million ITRs for the current assessment year have already been revised.
The 2026-27 Union Budget also announced a one-time, six-month window for declaration of foreign assets, allowing professionals, including those with undisclosed employee stock options and overseas funds, to come clean without facing penalties.
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