In a shocking revelation, Income Tax (I-T) officials in Jaipur have uncovered cryptocurrency transactions during raids on wedding planners. Over ₹20 crore worth of cash and jewellery were seized, and three crypto wallets were frozen. The planners were reportedly converting client payments into cryptocurrencies such as Bitcoin and USDT (Stablecoin), using hawala networks to move unreported funds.
Crypto Transactions Uncovered in Wedding Industry
During raids at around 20 wedding planning premises, I-T officials discovered hidden cryptocurrency accounts. Some wedding planners had been regularly converting the cash they received from clients into cryptocurrencies, potentially conducting some transactions using these virtual assets.
According to sources, three crypto wallets were found, one linked to an international exchange, while the others were associated with local platforms. The officials also discovered mentions of additional crypto accounts in WhatsApp chats, though the assessees refused to share their passwords. The I-T department took swift action by freezing the wallets and sending requests to exchanges for account information.
Hawala Networks Facilitate Crypto Transactions
The use of hawala operators to convert unreported cash into cryptocurrencies was a key discovery. Popular cryptos like USDT (a digital dollar) and Bitcoin are exchanged for Indian Rupees (INR) through these informal networks, which can then be moved to international exchanges.
This practice has become more challenging for users in recent years, as most exchanges now require Know Your Customer (KYC) checks before accepting deposits from private wallets. However, some are still finding ways to bypass this, potentially using slack KYC platforms or utilizing cheques to convert cash into crypto.
Expanding Investigations and Digital Evidence
Digital data from spreadsheets, emails, and WhatsApp chats provided a trail of unreported cash transactions related to weddings and events. The I-T department is now analyzing this data to uncover all parties involved in these illicit transactions.
The raids suggest a widespread network of wedding planners, hotel owners, decorators, caterers, and other vendors using both cash and banking channels to receive payments from customers. Authorities believe this could indicate a larger operation spanning cities like Hyderabad, Mumbai, and Delhi.
Violation of Tax Laws and the Cash Payment Limit
The wedding industry’s practice of accepting large amounts of unreported cash is a direct violation of tax laws. According to the Income Tax Act, no individual is allowed to receive ₹2 lakh or more in cash in a single transaction, or from a single person during an event. The I-T department is expected to conduct further investigations to uncover any illegal practices, including the use of dummy or mule accounts for depositing cash.
Impact on the Wedding Industry and Tax Compliance
While extravagant weddings may be motivated by prestige, social pressure, or a desire for opulence, the hidden financial practices of the industry could have serious consequences under tax law. The raids have highlighted a pressing need for better compliance with financial regulations in this lucrative sector.
