CBDT Launches NUDGE Campaign to Correct Ineligible Tax Deductions for AY 2025-26



Quick Summary
The Central Board of Direct Taxes (CBDT) has launched the NUDGE campaign, a voluntary compliance initiative for the Assessment Year 2025-26. Using advanced data analytics, the Income Tax Department has identified taxpayers who may have claimed ineligible deductions or exemptions, such as donations to unrecognised political parties or errors in PAN details. Affected individuals are being notified via SMS and email and encouraged to revise their Income Tax Returns by 31 December 2025 to prevent further investigation. Genuine claims require no action, but those missing the deadline can still file updated returns from January 2026, albeit with potential additional tax.

The Central Board of Direct Taxes (CBDT) has initiated a trust-based compliance drive encouraging taxpayers to voluntarily review and correct deduction or exemption claims that may be ineligible. Using advanced risk analytics, the Income Tax Department has identified cases for Assessment Year 2025-26 where incorrect or bogus deductions-such as donations to unrecognised political parties or errors in PAN details-appear to have been claimed. Affected taxpayers are being notified through SMS and em
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FAQ :

The NUDGE campaign, an initiative by the Central Board of Direct Taxes (CBDT), encourages taxpayers to voluntarily review and correct any ineligible or incorrect deduction or exemption claims made in their Income Tax Returns for Assessment Year 2025-26.

The Income Tax Department has used advanced risk analytics and data analytics to identify cases where incorrect or bogus deductions or exemptions may have been claimed, including issues with donations to political parties or incorrect PAN details.

Affected taxpayers are being notified through SMS and email as part of the NUDGE campaign.

Taxpayers are advised to revise their Income Tax Returns by 31 December 2025 to correct any ineligible claims and avoid further scrutiny.

If you miss the 31 December 2025 deadline, you may still file an updated return from 1 January 2026, but this will be subject to paying additional tax liability.

No, if your deduction or exemption claims are genuine and have been made correctly in accordance with the law, you do not need to take any further action.




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Finance news reporter covering taxation, GST, income tax, business compliance, and economy updates. I simplify complex financial topics into easy-to-understand articles for professionals, taxpayers, and business owners on leading finance and tax platforms.

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