"Several incriminating material on tax evasion have been found so far" during the raids which are underway, claimed the sources in the CBDT, which frames policy for the tax department.
The searches are being conducted on three different groups and a few individuals in the state, they said.
Tamil Nadu will vote for its 234-member assembly in a single phase on April 6.
"These groups and individuals are involved in businesses ranging from running distilleries and breweries, real estate, local financing, solar power EPC to handling cash of politically exposed persons for the ongoing elections," a senior tax department officer said.
"Part of these groups and individuals are alleged to have been actively assisting in political cash distribution. Searches have been conducted to verify and unearth such activities too," the officer said.
The DMK has condemned the central government for this action and alleged that it had a "political objective".
Party general secretary Duraimurugan said when parties are on the verge of completing campaigning and are looking forward to the day of polling, the income tax searches in the residence of Senthamarai was done with a "political objective".
The Centre has made a "wrong calculation" that raids just ahead of the election would shock Stalin, his family and the party, and also weaken poll preparations, he claimed while speaking to reporters in Vellore.
"The DMK is not a party that can be scared by such searches," he said adding that the party had already faced similar instances and it would not be deterred.