The Central Board of Direct Taxes (CBDT) has launched a data-driven “nudge” campaign for the 2025–26 assessment year, asking taxpayers to voluntarily review and correct deduction and exemption claims identified as potentially ineligible through risk analytics, including cases involving bogus donations to Registered Unrecognised Political Parties (RUPPs).
The initiative, which is advisory in nature, requires identified taxpayers to file revised income-tax returns (ITRs) by December 31, 2025. Those who miss the deadline may still file updated returns from January 1, 2026, but with additional tax liability as permitted under law.
Bogus deductions, invalid PANs flagged
“The department has launched a data-driven NUDGE campaign for AY 2025–26 encouraging taxpayers to voluntarily review deduction claims identified as potentially ineligible through risk analytics,” the CBDT said in a statement on December 23, adding that the outreach reflects a trust-first approach enabling voluntary correction wherever required.
The tax department said it has observed that certain taxpayers claimed ineligible refunds by availing deductions or exemptions to which they were not entitled, resulting in understatement of income. Under its risk management framework and advanced data analytics, cases for AY26 were identified where bogus donations to RUPPs and other ineligible deductions or exemptions appeared to have been claimed.
The CBDT also flagged instances where incorrect or invalid Permanent Account Numbers (PANs) were quoted, as well as errors relating to the extent of deductions or exemptions claimed.
December 31 deadline
Identified taxpayers are being contacted through SMS and email under the “Non-intrusive Usage of Data to Guide and Enable (NUDGE)” campaign to correct such errors before the December 31 deadline for filing revised returns.
Taxpayers whose deduction or exemption claims are genuine and correctly made in accordance with law are not required to take any further action, the board clarified.
Refund growth turns negative amid tighter scrutiny
The latest nudge comes amid a visible slowdown in refund outflows. Income-tax refunds stood at Rs 2.97 lakh crore between April 1 and December 17, down 13.52 percent compared with the same period last financial year, according to official data.
In an earlier interaction reported by Moneycontrol, the CBDT chairman on November 27 had pointed out that delays in refunds were linked to increased scrutiny of wrongful and inflated refund claims, with assessments being closely examined before releases.
The tax department said compliance efforts are already yielding results. During FY26, more than 21 lakh taxpayers have updated their ITRs for assessment years 2021–22 to 2024–25, paying over Rs 2,500 crore in taxes. In addition, over 15 lakh ITRs have already been revised for the current assessment year.
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