The Income Tax Department has begun issuing bulk “NUDGE” communications to taxpayers, prompting them to review their income tax returns (ITRs) and correct possible discrepancies such as underreported income, undisclosed assets or wrongly claimed exemptions, sources in the know of the development told CNBC-TV18.
The outreach, sources said, is largely targeted at individuals designated as key management personnel in companies and those reporting annual income above ₹50 lakh. The messages also flag cases where information disclosed in ITRs appears to contradict data available with the tax department.
The NUDGE initiative — Non-intrusive Usage of Data to Guide & Enable — is part of the government’s broader push towards data-driven compliance and voluntary correction of tax filings.
Advisory outreach, not enforcement action
Officials have described the NUDGE campaign as advisory in nature, aimed at encouraging taxpayers to review and revise their returns before the matter escalates into scrutiny or penalty proceedings. The initiative leverages risk analytics and third-party data to identify potential errors in deduction or exemption claims and other reporting mismatches.
The campaign also asks taxpayers to revisit returns where deductions or exemptions appear potentially ineligible or inconsistent with available financial information.
Tax authorities say the move reflects a trust-based compliance model, where taxpayers are given an opportunity to correct errors voluntarily rather than face immediate enforcement action.
Part of broader data-driven compliance push
The Central Board of Direct Taxes (CBDT), which oversees direct tax administration in India, has been expanding the use of analytics and information-sharing frameworks to detect mismatches in tax filings. The NUDGE initiative is designed to improve voluntary compliance and promote accurate reporting through technology-enabled monitoring.
The first NUDGE campaign, launched in November 2024, focused on taxpayers who had foreign assets reported by overseas jurisdictions but had not disclosed them in their returns. Following the outreach, 24,678 taxpayers revisited their filings, disclosing foreign assets worth ₹29,208 crore and foreign-source income of ₹1,089.88 crore, according to government data.
Subsequent campaigns have expanded the scope to cover other discrepancies, including incorrect deduction claims, high-value transactions and mismatches between ITRs and information in the Annual Information Statement (AIS).
Increased focus on high-income and risk-flagged cases
The latest set of communications comes as the tax department intensifies scrutiny of high-income individuals and cases flagged through analytics for possible misuse of exemptions or inconsistencies in reporting.
Under the campaign, taxpayers receiving the communication are advised to review their returns and, if necessary, file revised or updated ITRs and pay additional tax to avoid penalties.
The government has increasingly relied on digital reporting systems and cross-border information exchanges to identify such discrepancies, a shift that officials say is aimed at strengthening compliance while reducing intrusive enforcement measures.
For taxpayers, experts say the key is to reconcile income declarations with data reflected in AIS and other reporting systems, especially in cases involving high-value transactions, compensation disclosures or exemption claims.
