The Central Board of Direct Taxes (CBDT) has initiated a novel, data-centric campaign for the 2025–26 assessment year, aiming to prompt taxpayers to voluntarily correct their income-tax returns. Dubbed the "NUDGE" campaign, it focuses on claims for deductions and exemptions that the department's risk analytics have flagged as potentially invalid.
Understanding the NUDGE Campaign's Core Mechanism
This advisory initiative, announced on December 23, specifically targets taxpayers whose returns show claims linked to ineligible items. A prime example highlighted by the CBDT involves bogus donations made to Registered Unrecognised Political Parties (RUPPs). The department has identified such cases, along with other inadmissible deductions, using its sophisticated risk management framework and advanced data analytics.
The campaign operates on a principle of voluntary compliance. Identified individuals are being contacted directly via SMS and email under the "Non-intrusive Usage of Data to Guide and Enable (NUDGE)" program. The message is clear: review your claims and file a revised return if necessary.
Critical Deadlines and Consequences of Inaction
The CBDT has set a firm deadline for this corrective action. Taxpayers who wish to avoid additional liabilities must file their revised Income-Tax Returns (ITRs) by December 31, 2025. For those who miss this date, an option remains to submit an updated return starting January 1, 2026. However, this late filing will attract extra tax charges as stipulated by law.
The board clarified that this campaign is not a blanket scrutiny. Taxpayers with genuine and correctly filed claims need not take any action. The effort is squarely aimed at instances where the department detected underreported income due to ineligible refunds secured via wrong deductions.
Other discrepancies being flagged include cases where taxpayers provided incorrect or invalid Permanent Account Numbers (PANs) and mismatches in the amount or nature of the exemptions claimed.
Broader Context: A Move Amid Slowing Refund Outflows
This proactive nudge from the tax authority arrives at a significant juncture. Official data reveals a noticeable slowdown in refund disbursements. Between April 1 and December 17 of the current financial year, income-tax refunds amounted to ₹2.97 lakh crore. This figure marks a substantial 13.52 per cent decline compared to the same period in the previous year.
The campaign underscores a strategic shift towards pre-emptive, data-driven compliance rather than purely punitive post-assessment actions. By encouraging taxpayers to self-correct, the CBDT aims to enhance the accuracy of returns and ensure rightful revenue collection for the government.
