Income Tax Dept Busts ₹20,000 Crore Gold Laundering Racket in Hyderabad

The Income Tax Department has uncovered a massive gold laundering racket worth nearly Rs. 20,000 crore during raids on leading bullion firms in Telangana and Andhra Pradesh. The crackdown exposed how black money was being converted into gold through thousands of small transactions that appeared legitimate on paper.

Officials confirmed that raids were carried out on three major bullion companies: DP Gold, CapsGold, and Yash Oro (Yashora). DP Gold, which is based in Nellore and has expanded operations to Hyderabad, Vijayawada, Mumbai, and Chennai, was at the centre of the investigation. The company, owned by Dilip Kumar Jain and associates, reportedly handled gold worth thousands of crores each year.

Investigators found that unaccounted cash was turned into gold by slicing gold biscuits into smaller pieces of 20 grams. These were wrapped in paper and sold in small transactions. Each purchase was deliberately kept below Rs. 2 lakh.

This strategy allowed the traders to bypass the rule that requires buyers to provide their Permanent Account Number (PAN) for higher-value purchases. By repeating such small sales thousands of times, the companies created an artificial trail that masked huge volumes of untaxed trade.

Raids were also conducted at CapsGold’s offices in Banjara Hills, Secunderabad, and Abids, along with the homes of its directors. CapsGold, established in 1901, is one of India’s oldest and largest bullion merchants. The search also extended to the Vasavi Real Estate Group, as one of its promoters is related to a director at CapsGold.

At Yash Oro in Banjara Hills, run by brothers Ritesh and Rajesh Naredi, investigators uncovered how small operators deposited cash and created fresh bills to launder money. In one suspicious case, a refinery sold gold worth crores to a penny stock pharmaceutical company in Gujarat, which trades at less than one rupee per share.

Officials also found that in several instances, gold was formally purchased from banks but the funds eventually circled back as repayments, suggesting cash was the real medium of exchange.

During the raids, officials seized more than Rs. 1 crore in cash. Authorities believe the uncovered scheme resembles methods seen during the demonetisation era, when traders used fragmented transactions to conceal large volumes of black money. The Income Tax Department has said it will continue tracing the money trail to expose everyone involved in this racket.

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