Income Tax Department to investigate 6 Foreign Tour Package Companies for alleged Tax Evasion

The Income Tax Department is looking into tax evasion by six firms that sell international travel packages. These firms are being investigated for a variety of charges, including underreporting income, failing to deduct the required tax (TDS), and perhaps being involved in money transfers overseas through unauthorised ways, such as a hawala scam.

IT Department allegedly issued these entities with show cause notices between June and July. The investigation uncovered instances of gross revenue underreporting and the use of forged names, residences, and identities when buying travel packages. There have also been cases where travel packages were ordered in the name of one individual for numerous quarters, only to be discovered to be fraudulent following closer inspection.

The tax evasion events are claimed to have happened beginning with the financial year 2019-2020, and the total tax evasion sum from all six operators is estimated to be over Rs.600 crore.

One of the charges is that these organisations used fictitious identities to book pricey trip packages in the names of people who couldn’t afford them. Furthermore, these tour operators were not deducting the requisite 5% Tax Deducted at Source (TDS) for the trip packages, which is required by tax rules.

This case exposes the possibility of financial irregularities and tax fraud in the tourism business. Tax authorities conduct investigations and take steps to guarantee compliance with tax rules and to avoid cases of evasion and fraud.