The Income Tax Department's NUDGE (Non-intrusive Usage of Data to Guide and Enable) campaign has generated significant results over the past two years. According to Minister of State for Finance Pankaj Chaudhary, the initiative resulted in 1.25 crore taxpayers filing updated or revised Income Tax Returns (ITRs) during 2024-25 and 2025-26. The campaign has also collected an additional ₹9,493.66 crore in tax payments from these revised filings, demonstrating the effectiveness of data-driven tax compliance efforts. As reported by the Finance Ministry in Lok Sabha on August 3, 2026, these NUDGE campaigns have boosted government revenue by over ₹12,121.91 crore through their comprehensive approach to tax collection. The voluntary compliance drive has helped improve taxpayer behavior by encouraging corrections before enforcement action becomes necessary.
The Central Board of Direct Taxes (CBDT) has implemented the NUDGE campaign by leveraging data analytics, behavioural insights and digital communication platforms for improved tax collection efficiency. The department has developed an in-house data analytics system that assimilates and analyses information as well as transactional data received from third-parties, including Statement of Financial Transactions (SFT), Tax Deducted at Source (TDS), Tax Collected at Source (TCS), GST data, high-value transactions from banks and financial institutions, purchase/sale of immovable property from IG (Registration)/Registrar/Sub-registrar, etc. to identify potential tax evasion. As reported by the Finance Ministry, the campaign operates through selective communications to taxpayers after due risk analysis to review and revise their already filed ITRs. Taxpayers are specifically selected based on advanced risk analysis identifying incorrect or non-reporting of assets or income, or excess claims of deductions or exemptions in their original returns. The department's data-driven approach includes analyzing GST records, banking transactions, and property registrations to track down tax evaders and identify discrepancies based on false or unverifiable entries.
The CBDT has implemented a seven-stage strategy called SAKSHAM covering data collection, risk analysis, targeted interventions, taxpayer outreach, assistance, transparency and continuous evaluation. Under these campaigns, taxpayers identified through advanced risk analysis are encouraged to review and revise their Income Tax Returns where discrepancies such as under-reporting of income, incorrect asset disclosures or excess deduction claims are detected. The department also conducted nationwide outreach programmes to encourage voluntary corrections through revised, belated or updated returns. The ministry added that CBDT has strengthened tax administration through measures such as pre-filled ITRs, enhanced validation checks during return processing, verification of mismatches between taxpayer disclosures and reporting entities, data analytics-based fraud detection, NUDGE campaigns, e-verification, search and seizure operations, assessments, penalties and prosecution to prevent recurrence of fraudulent claims. The initiative marks a shift in the tax department's compliance strategy from post-facto enforcement to preventive, technology-enabled interventions.
According to Chaudhary's written reply in the Lok Sabha on August 3, 2026, during the last five years, the Income Tax Department has detected cases of wrongful tax reliefs and claims of non-genuine deduction. These cases have been identified through data analytics and verification exercises, further corroborated through searches and surveys carried out against entities, professional intermediaries and other persons suspected of facilitating such claims. The department has recovered evidence regarding tax evasion and other violations under the Income Tax Act through these comprehensive investigations. The government confirmed that investigations and data analytics have identified categories of intermediaries involved in facilitating fraudulent tax claims, including tax return preparers and chartered accountants. Action taken includes NUDGE campaigns, e-verification, search and seizure operations, surveys, assessments, reassessments, penalties and prosecution. Information relating to tax professionals found involved in such cases has also been shared with relevant regulatory and enforcement bodies, including the Institute of Chartered Accountants of India (ICAI).
