Tax raids on Jaipur wedding planners reveal Crypto use, Rs 20 cr in cash & jewels seized

Looking for hidden cash trails in the books of large wedding planners in Jaipur, the tax men have stumbled upon something they least expected: Cryptos.

Some of the organisers of these extravagant marriages appear to be regular users of cryptocurrencies— primarily converting the cash received from clients into cryptos, and perhaps occasionally even carrying out some of the transactions with the virtual digital assets.

More than Rs 20 crore worth of cash and jewellery have been seized and three crypto wallets have been frozen during the raids conducted last week on around 20 premises. In the course of the search operations, Income Tax (I-T) officials spotted the mention of more crypto accounts in WhatsApp chats.


“The assessees refused to share passwords. Emails were sent to the nodal compliance officers (of the exchanges). The accounts have been frozen and the balances were obtained...” said a tax official.

Searches Likely in Other Cities

“This is the first time the department has come across undisclosed cryptocurrency accounts during a search in Rajasthan,” the person said.

One of the crypto wallets is with a leading international exchange while the other two are with local platforms. According to a source, unreported cash can be swapped into popular cryptos like USDT (or Stablecoin) and Bitcoin by using the services of hawala operators in Gujarat and Rajasthan. USDT, also known as digital dollar, is backed by reserves of the US currency, while Bitcoin (or BTC) is the most liquid crypto that is at the forefront of the latest crypto bull run.

“The same way rupees accepted here can be exchanged for dollars abroad through the hawala network, USDT or BTC can be credited to a private wallet against cash INR received here by the hawala boys. Transferring crypto from a private wallet to your wallet with an overseas exchange is no big deal,” said an industry person.

But depositing cryptos—obtained from a hawala operator and parked in aprivate wallet—to a member’s wallet or account with a registered crypto exchange has become more difficult in the past one year. “Except maybe a few, most crypto exchanges which share data with the Financial Intelligence Unit (under the finance ministry) would disallow such random crypto deposits from private, external wallets. So, they may be using platforms where KYC is slack or finding a way to exchange cash for cheques with entry operators against some fake service before using the proceeds to buy cryptos on a domestic exchange,” said another person.

Suspicious digital data has been found in excel sheets, WhatsApp chats of key persons and emails evidencing unaccounted cash transactions in weddings and events, said a person familiar with the search. “A detailed analysis will be done as part of the post-search proceedings to identify the parties involved in unaccounted cash transactions,” he said.

It is believed that similar searches may be carried out on planners based in Hyderabad, Mumbai, and Delhi. Information gathered from the raids have revealed a nexus between resorts, hotel owners, wedding event planners, caterers, florists, decorators, wherein customers are given option to pay amounts either through cash or banking channels as per their convenience.

“The use of dummy and mule accounts for deposit of cash by customers has been noticed and shall be further explored in the post search proceedings,” said one of the officers.

While the urge to splurge on family weddings, comprising multiple events that may last close to a week, may be driven by social compulsions, prestige, an impulse to display wealth, or simply the urge to make it the life's most memorable event, it could mean trampling on tax laws—even if unwittingly.

According to the I-T Act, no person can receive an amount of Rs 2 lakh or more in cash in aggregate from a person in a day; or in respect of a single transaction; or, in respect of transactions relating to one event or occasion from a person. However, cash received from the government, bank, post-office, co-operative bank, and government notified associations would not be penalised.Rashmi Rajput