 "India's grand weddings face tax raids over Rs 7,500 crore unaccounted cash")
Lavish Indian weddings that often feature Bollywood celebrities and elaborate arrangements costing crores, are now under the scanner of the Income Tax (I-T) department. These larger-than-life celebrations are being scrutinised for alleged misuse of unaccounted cash.
Tax raids target wedding planners
The I-T department has launched investigations into approximately 20 top wedding planners in Jaipur, suspecting that over Rs 7,500 crore of undisclosed funds have been spent in the past year on extravagant weddings, according to a report by The Economic Times.
Sources suggest a network involving mule accounts, hawala agents, and fake bill generators, often linked to associates in cities like Hyderabad and Bangalore, supports this high-value trade.
Focus on cash transactions
The ongoing search operations, which began earlier this week, are likely to extend over several days. These investigations primarily aim to trace cash transactions, which reportedly constitute 50-60 per cent of the total expenses for these weddings. Authorities are also examining the money trail of foreign destination weddings, where private jets are booked to transport guests and celebrities to exotic locations, the report said.
The Economic Times quoted Rajesh P Shah, a tax and FEMA expert at Jayantilal Thakkar & Company, saying that the tax department compares reported expenses with the scale of the event and guest lists.
Violations of tax and foreign exchange rules are common in such cases, especially for overseas weddings exceeding Reserve Bank of India’s Liberalised Remittance Scheme (LRS) limits, Shah said.
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Jaipur: The hub of wedding planning
Preliminary findings suggest Jaipur is a key centre for luxury wedding planning. Planners from other cities collaborate with Jaipur-based organisers, who coordinate with high-end hotels, caterers, florists, and celebrity managers to execute these events.
The news report quoted an I-T official as saying luxury clients approach prominent local event planners, who then rely on Jaipur planners to manage the entire operation. These planners often accept cash payments, aligning with client preferences, the official mentioned.
To facilitate cash-heavy transactions, wedding planners employ third-party operators who legitimise payments through fake billing. These bills, issued by GST-registered entities, are used to claim fraudulent input tax credits. Initial leads for the investigation were derived from these fictitious transactions.
These revelations highlight the substantial undisclosed wealth circulating in non-metro cities. Tax authorities have increasingly shifted their focus from large corporations to sectors like event planning, uncovering widespread evasion, the report said.
Foreign destination weddings face additional scrutiny due to strict forex regulations. In one instance, a private bank asked a client hosting an overseas wedding to provide PAN details for all guests, reportedly as part of LRS compliance. Such queries, however, have discouraged families from hosting offshore events, aligning with the government’s call to promote “wed-in-India” initiatives and curb foreign exchange outflow, the report added.
Role of remittance limits
The report quoted Harshal Bhuta of PR Bhuta & Co as saying that remittances for destination weddings must adhere to individual LRS limits. In cases where these limits are exceeded, families rely on NRI relatives or irregular channels for additional funds. Nonetheless, regulatory scrutiny has made such practices increasingly risky.