EE News Desk
Dec 23, 2024
These transactions reportedly account for 50-60 per cent of the total expenses for these extravagant weddings – the I-T department is investigating nearly 20 prominent wedding planners in Jaipur
Very recently, lavish Indian weddings, often featuring Bollywood celebrities and extravagant arrangements costing crores, have been scrutinised by the Income Tax (I-T) department for alleged misuse of unaccounted cash.
Tax Raids on Wedding Planners
As per media reports, the I-T department is investigating nearly 20 prominent wedding planners in Jaipur, suspecting that over Rs 7,500 crore of undisclosed funds were spent on grand weddings in the past year.
Sources reveal the existence of a network involving mule accounts, hawala agents, and fake bill generators, frequently linked to associates in cities like Hyderabad and Bangalore, facilitating these high-value transactions.
Emphasis on Cash Transactions
Search operations, which began earlier in the previous week, are expected to continue for several days as authorities focus on uncovering cash transactions. These transactions reportedly account for 50-60 percent of the total expenses for these extravagant weddings. According to the report, investigators are also tracking the financial trail of foreign destination weddings, where private jets are often chartered to fly guests and celebrities to exotic locations.
One of the media reports quoted Rajesh P Shah, a tax and FEMA expert at Jayantilal Thakkar & Company, who explained that the tax department compares reported expenses with the event’s scale and guest lists.
Shah noted that violations of tax and foreign exchange regulations are common in such cases, particularly for overseas weddings that exceed the Reserve Bank of India’s Liberalised Remittance Scheme (LRS) limits.
Jaipur: A Hub for Luxury Wedding Planning
Initial investigations reveal that Jaipur serves as a major centre for luxury wedding planning. Event planners from other cities collaborate with Jaipur-based organisers, who work with high-end hotels, caterers, florists, and celebrity managers to deliver these opulent celebrations.
According to an I-T official quoted in the report, luxury clients often approach prominent local planners who, in turn, depend on Jaipur-based teams to manage the entire operation. These planners frequently accept cash payments to accommodate client preferences, the official added.
To handle cash-heavy transactions, wedding planners enlist third-party operators to legitimise payments through fake billing. These bills, issued by GST-registered entities, enable fraudulent claims for input tax credits. Investigators initially uncovered leads for the probe from these fictitious transactions.
These findings underscore the significant amount of undisclosed wealth circulating in non-metro cities. Tax authorities have shifted their focus from large corporations to industries like event planning, exposing widespread tax evasion, the report stated.
Foreign destination weddings are under additional scrutiny due to strict forex regulations. In one case, a private bank reportedly asked a client hosting an overseas wedding to provide PAN details for all guests to ensure compliance with the Liberalised Remittance Scheme (LRS). Such requirements have deterred families from hosting offshore events, aligning with the government’s push to promote “wed-in-India” initiatives and reduce foreign exchange outflow, the report noted.
Role of Remittance Limits
Harshal Bhuta of PR Bhuta & Co explained that remittances for destination weddings must adhere to individual LRS limits. When these limits are exceeded, families often turn to NRI relatives or irregular channels for additional funds. However, increased regulatory scrutiny has made such practices significantly riskier.
