The Income Tax department has detected more than Rs 5,800 crore of concealed income in the low-profile micro, small and medium enterprises (MSME) sector during the fiscal 2010-11.

The department, which carries out a number of searches against other high income sectors like real estate, manufacturing and sales, has for the time put its scanner on the sector which accounts for about 45 per cent of the manufacturing output of the country.

According to the latest data compiled by I-T department, the department detected a total of Rs 5,894.44 crore unreported income after it carried out 3,911 raids on various MSME-related units across the country during 2010-11.

The department, in many cases, has also raised a tax demand which are at various stages of realisation, a top I-T official said.

During the fiscal 2009-10, the department had detected a similar hidden income of Rs 4,857.10 crore in the sector after it carried out 4,680 raids on various business units.

According to the MSME Ministry, the sector employs an estimated 59.7 million people in more than 26.1 million enterprises and it is estimated that the sector accounts for around 40 per cent of the total export of the country.

"This is an emerging growth sector but unfortunately the department found that a huge tax is being avoided here. The modus operandi to evade taxes in the sector has been to under-report or hide the profits that the sector made by even usurping easy loans that the sector gets from various banks and other financial channels," the official said. (PTI)