The raids started around 7.30 a.m. simultaneously at 12 sites, including the residences of the two actresses in the western suburbs. Priyanka's home in Versova, Andheri West, was raided.
Also raided were the homes of their secretaries, their respective office premises and other locations, the official said.
The IT department is investigating whether the two actresses have paid taxes proportionate to their known sources of income during the past year.
Both Katrina and Priyanka are high ranking Bollywood actresses who work with top stars and leading film banners, besides endorsing top brands and participating in the major stage shows in India and abroad.
The raids are still continuing.