The Central Board of Direct Taxes (CBDT) has initiated a data-driven “NUDGE” campaign for the Assessment Year 2025–26, urging taxpayers to voluntarily review and correct deduction and exemption claims that may be ineligible. The campaign particularly targets cases involving bogus donations made to Registered Unrecognised Political Parties (RUPPs).
As part of this advisory initiative, taxpayers identified through advanced risk analytics have been asked to file revised income-tax returns (ITRs) by December 31, 2025. Those who fail to do so can still submit updated returns from January 1, 2026, but with additional tax liability as prescribed under the Income-tax Act.
In a statement issued on December 23, the CBDT said the campaign reflects a “trust-first” approach, encouraging voluntary compliance and self-correction without immediate enforcement action. According to the tax authority, its analytics framework has detected instances where taxpayers claimed deductions or exemptions they were not entitled to, leading to understatement of income and wrongful refunds.
The department has flagged several issues, including bogus political donations, excessive or incorrect deduction claims, and the use of invalid or incorrect PAN details. These discrepancies were identified under the department’s enhanced risk management and data-matching systems.
Affected taxpayers are being contacted via SMS and email under the “Non-intrusive Usage of Data to Guide and Enable (NUDGE)” programme. However, the CBDT clarified that taxpayers whose claims are genuine and compliant with the law need not take any action.
The campaign comes at a time when income-tax refund outflows have slowed. Refunds issued between April 1 and December 17 stood at ₹2.97 lakh crore, a decline of 13.52% compared to the same period last year. Earlier, CBDT officials had attributed refund delays to tighter scrutiny of inflated and wrongful refund claims.
The tax department noted that compliance measures are already showing results. During FY26, over 21 lakh taxpayers updated their returns for AYs 2021–22 to 2024–25, resulting in additional tax payments exceeding ₹2,500 crore. Further, more than 15 lakh returns have already been revised for the current assessment year.
