The Income Tax Department has initiated a data-driven NUDGE campaign for the Assessment Year 2025-26. This campaign aims to encourage taxpayers to voluntarily review and rectify their deduction and exemption claims identified as potentially ineligible. This initiative represents a trust-based, non-intrusive compliance strategy, especially as the December 31 deadline for filing revised Income Tax Returns (ITRs) approaches.
Under the "Non-intrusive Usage of Data to Guide and Enable (NUDGE)" framework, the Income Tax Department is employing advanced risk analytics to pinpoint discrepancies in filed returns. Taxpayers selected for this outreach receive notifications via SMS and email, encouraging them to verify and, if necessary, amend their claims voluntarily.
The department has noted that its analytics-based risk management framework has highlighted cases involving claims of bogus donations to Registered Unrecognised Political Parties, as well as other ineligible deductions or exemptions. In some cases, incorrect or invalid Permanent Account Numbers (PANs) have been recorded, and errors in the amounts of deductions claimed have also been observed. The approach taken is advisory, prioritizing guidance over enforcement.
The NUDGE outreach is designed to be strictly advisory, not coercive. Its primary goal is to promote transparency, encourage voluntary compliance, and enhance taxpayer convenience by allowing for self-correction before the statutory deadlines. By leveraging technology and data analytics, the initiative aims to minimize litigation and foster a cooperative environment in tax administration.
The Income Tax Department has observed a strong trend of taxpayer participation in voluntary compliance. During the 2025-26 period, over 21 lakh taxpayers updated their ITRs for Assessment Years 2021-22 to 2024-25, resulting in additional tax payments exceeding ₹2,500 crore. For the current Assessment Year 2025-26 alone, more than 15 lakh revised returns have already been filed, indicating an increasing acceptance of data-driven, guidance-based compliance mechanisms.
Q1. What is the NUDGE campaign by the Income Tax Department?
Answer: The NUDGE campaign is an initiative by the Income Tax Department aimed at encouraging taxpayers to voluntarily review and correct potentially ineligible deduction and exemption claims using data analytics.
Q2. What does NUDGE stand for?
Answer: NUDGE stands for "Non-intrusive Usage of Data to Guide and Enable," focusing on advisory outreach to promote compliance among taxpayers.
Q3. What is the deadline for filing revised ITRs under the NUDGE campaign?
Answer: The deadline for filing revised Income Tax Returns (ITRs) under the NUDGE campaign is December 31 of the assessment year.
Q4. How many taxpayers participated in the NUDGE campaign so far?
Answer: Over 21 lakh taxpayers updated their ITRs for previous years during the 2025-26 period, reflecting significant participation in the NUDGE campaign.
Q5. What types of discrepancies are targeted by the NUDGE campaign?
Answer: The campaign targets discrepancies such as bogus donations to political parties and incorrect PANs, promoting voluntary corrections by taxpayers.
Question 1: What is the primary aim of the NUDGE campaign?
A) To enforce tax compliance strictly
B) To encourage voluntary correction of claims
C) To increase tax rates
D) To introduce new tax laws
Correct Answer: B
Question 2: Which year does the NUDGE campaign target for compliance?
A) 2024-25
B) 2025-26
C) 2026-27
D) 2023-24
Correct Answer: B
Question 3: What does the acronym NUDGE emphasize in its approach?
A) Coercive measures
B) Non-intrusive guidance
C) Increased penalties
D) Mandatory audits
Correct Answer: B
Question 4: Which technology is utilized in the NUDGE campaign?
A) Blockchain
B) Risk analytics
C) Artificial intelligence
D) Cloud computing
Correct Answer: B
Question 5: How many revised returns were filed for the 2025-26 assessment year?
A) 5 lakh
B) 10 lakh
C) 15 lakh
D) 20 lakh
Correct Answer: C
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