"With an annual import of around 800 tonnes of gold, we are the largest consumer of gold jewellery in the world. Although the transactions in this market involve huge black money and tax evasion, but we are so far unable to monitor the market due to constraints of manpower," Central Board of Direct Taxes Commissioner A.K. Sinha told The Tribune.

However, with the sanctioning of funds for vehicles for IT officials this year, he said, the department would conduct large-scale surveys of major jewellery shops in major cities across the country during festival season.

The results of surveys conducted during last festival season, he said, had yielded good results, thus encouraging the department to undertake the exercise seriously. However, we would do it in a subtle manner without antagonising the traders and investors community during the festival period, he said.

The industry experts claim that with the gold prices coming down from Rs 10,000 per 10 gm to around Rs 8,500, large number of people are buying new gold and diamond jewellery during the ongoing festival season.

The financial consultants are also forecasting that the gold prices are likely to firm up again, leading to large-scale buying by investors who consider it a safe bet for good returns. It is another matter that huge financial gains will not be shown in the income tax returns.