CBDT’s Risk Management NUDGE Flags Bogus Deductions, Urges Voluntary ITR Corrections Before 31 Dec
The campaign, branded as “NUDGE,” uses advanced analytics to flag issues such as bogus donations, invalid PANs, and overclaimed exemptions.
The Central Board of Direct Taxes ( CBDT ) has launched a campaign under its risk management framework to highlight possible ineligible deduction and exemption claims under Income-tax Returns (ITRs) for Assessment Year (AY) 2025-26. The initiative, named “Non-intrusive Usage of Data to Guide and Enable” (NUDGE), anchors advanced data analytics to identify discrepancies...
The Central Board of Direct Taxes ( CBDT ) has launched a campaign under its risk management framework to highlight possible ineligible deduction and exemption claims under Income-tax Returns (ITRs) for Assessment Year (AY) 2025-26.
The initiative, named “Non-intrusive Usage of Data to Guide and Enable” (NUDGE), anchors advanced data analytics to identify discrepancies and encourages taxpayers to self-correct their filings before the deadline of 31 December 2025.
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As per the official press release issued on 23 December 2025, CBDT has highlighted instances where taxpayers have minimised income by claiming deductions or exemptions they are not legally entitled to.
These include bogus donations to Registered Unrecognised Political Parties (RUPPs), quoting of incorrect or invalid PANs of donees, and errors in the extent of deductions claimed. The department has spotlighted such cases using its risk management tools and is reaching out to affected taxpayers via SMS and email.
The campaign is positioned as part of the government’s “trust-first” approach to tax administration. Rather than initiating intrusive scrutiny, CBDT is offering taxpayers an opportunity to voluntarily review and revise their returns.
The campaign is advisory in nature, and taxpayers with genuine claims are not required to take any action. However, those who have received alerts are advised to verify their filings and make necessary corrections before the deadline to avoid further enquiries.
CBDT’s data shows that the campaign has already led to remarkable compliance activity. Over 21 lakh taxpayers have updated their ITRs for AYs 2021–22 to 2024–25, resulting in tax payments exceeding ₹2,500 crore.
For AY 2025026 alone, more than 15 lakh returns have been revised, indicating a lot of response to the NUDGE alerts. Taxpayers who miss the 31 December deadline may still file updated returns from 1 January 2026, subject to payment of additional tax liability as per law.
As the 31 December deadline approaches, taxpayers are advised to carefully review their deduction and exemption claims, consult with professionals where needed, and take correct steps only if warranted.
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