Jewelers allegedly dodging taxes by using banned accounting tricks
The Income Tax Department is going after several jewelry companies for allegedly using banned accounting tricks to hide profits and dodge taxes.
For years, some jewelers have been undervaluing their gold inventory by using the LIFO (last-in, first-out) method—which isn't allowed—making their profits look smaller and shrinking what they owe in taxes.
This has reportedly been happening since at least 2017-18, despite clear tax rules against it.
Gold's rising value makes it easier to hide profits
With gold prices jumping from ₹31,000 per 10gm in 2019 to nearly ₹98,000 in 2024, it's become easier for firms to fudge numbers and slip under the radar.
The I-T Department recently conducted raids. One company already had to cough up nearly ₹100 crore in back taxes after getting caught.
Authorities say they're stepping up checks to make sure jewelry businesses play fair and report real profits.