Income Tax Department conducts raids at Jane Street and Nuvama in Mumbai regarding alleged market activities.

The Income Tax Department recently conducted survey operations at the Mumbai offices of Jane Street, a US-based trading giant, and its Indian partner, Nuvama Wealth. This action stems from SEBI’s investigation into possible market manipulation in Bank Nifty options trading. The primary focus of the probe is to uncover any suspected tax and regulatory violations that may have occurred.

This move by the Income Tax Department is a significant development in connection with a large-scale trading manipulation case in India. The department initiated survey operations at the premises of Jane Street and Nuvama Wealth in Mumbai as part of a coordinated effort to investigate potential tax irregularities and financial misconduct. These operations, which commenced early in the day, involved the collection of electronic data, financial statements, communications, and trading records from both entities.

The background of this investigation traces back to SEBI’s actions against Jane Street in early July 2025. SEBI imposed a trading ban on Jane Street and its affiliated entities, alleging that the firm engaged in manipulative practices in the Bank Nifty derivative market, resulting in unfair profits exceeding ₹36,000 crore. The regulator specifically highlighted Jane Street’s trading strategy involving the Nifty Bank Index, where the firm bought underlying stocks while simultaneously shorting options to distort market dynamics. According to SEBI, these trades were deemed manipulative and detrimental to the market’s integrity.

Subsequently, SEBI required Jane Street to deposit ₹4,843 crore in an escrow account by a specified deadline before lifting the trading ban. Jane Street complied with this directive and was allowed to resume trading on July 21.

The ongoing survey by the Income Tax Department is focused on various aspects related to Jane Street and Nuvama, including examining potential profit routing through India, verifying Nuvama’s role in facilitating trades for Jane Street, assessing compliance with tax regulations such as General Anti-Avoidance Rules (GAAR), and reviewing adherence to Transfer Pricing norms and Permanent Establishment (PE) thresholds. These investigations are being conducted under the provisions of Section 133A of the Income Tax Act, granting authorities the power to conduct non-intrusive surveys and account verifications at business premises.

Jane Street Group LLC, based in New York, is renowned for its proprietary trading strategies, particularly in algorithmic and high-frequency trading. Nuvama Wealth, previously known as Edelweiss Broking, is a prominent financial services firm in India that offers trading and investment solutions. The company played a significant role as the custodian and on-ground partner for Jane Street’s operations in the Indian markets.

In response to the news of the Income Tax survey, Nuvama’s shares experienced a decline of approximately 4% on the National Stock Exchange (NSE), closing at around ₹7,139.50. Market analysts attribute this downturn to investor apprehensions regarding potential legal and financial implications for the company arising from the ongoing investigations.

This series of events highlights the complex and interconnected nature of financial markets, regulatory oversight, and tax compliance, underscoring the importance of maintaining integrity and transparency in trading practices.