Why Did the Income Tax Dept Flag Ineligible Deduction Claims in ITRs?
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Synopsis
The Central Board of Direct Taxes has launched a significant campaign urging taxpayers to review potentially ineligible deduction claims. This initiative, based on advanced data analytics, aims to enhance compliance and ensure accurate tax filings.
Key Takeaways
- Taxpayers are encouraged to review their deduction claims.
- Revised ITRs must be filed by December 31, 2025.
- Claims related to bogus donations are under scrutiny.
- Taxpayers will receive notifications via SMS and Email.
- Correct contact details are crucial for communication.
New Delhi, Dec 23 (NationPress) The Central Board of Direct Taxes (CBDT) has initiated a “Nudge” campaign for the 2025–26 assessment year on Tuesday, urging taxpayers to voluntarily assess and amend deduction or exemption claims flagged as potentially ineligible using the Income Tax Department’s sophisticated data analytics.
Many of these claims, submitted in the income tax returns (ITRs), involve instances of fraudulent donations to Registered Unrecognised Political Parties (RUPPs), as indicated in the statement released by the CBDT, the principal authority of the Income Tax Department.
The campaign, which serves as an advisory, asks the identified taxpayers to submit revised income tax returns (ITRs) by December 31, 2025. Those who fail to meet this deadline can file updated returns starting from January 1, 2026, but will incur additional tax liabilities as stipulated by law.
“The department has rolled out a data-driven NUDGE campaign for AY 2025–26, motivating taxpayers to voluntarily review deduction claims deemed potentially ineligible through risk analytics. This outreach demonstrates a trust-first strategy, allowing for voluntary corrections when necessary,” the statement elaborated.
The tax authority noted that certain taxpayers have claimed ineligible refunds by utilizing deductions or exemptions they were not entitled to, leading to an understatement of their income.
Through its risk management framework and advanced data analytics, cases for AY26 have been identified where fraudulent donations to registered unrecognised political parties and other ineligible deductions or exemptions seem to have been claimed.
The CBDT has also highlighted cases where incorrect or invalid Permanent Account Numbers (PANs) were cited, along with errors concerning the amount of deductions or exemptions claimed.
As part of this campaign, SMS and Email advisories are being dispatched this month to affected taxpayers on their registered mobile numbers and email addresses.
The CBDT has urged taxpayers to verify that their mobile and email information is accurate in their filings to avoid missing crucial communications.
The Nonintrusive Usage of Data to Guide and Enable (NUDGE) initiative is a taxpayer-centric effort aimed at enhancing voluntary compliance. Further details on deduction provisions and the filing of updated returns can be found at www.incometax.gov.in.
Point of View
I believe the CBDT's Nudge campaign represents a proactive approach to tax compliance. By encouraging taxpayers to self-correct, the initiative promotes transparency and accountability in the tax system. It's essential for taxpayers to engage with this campaign to ensure their claims are legitimate and to avoid future complications.
NationPress
23/12/2025
Frequently Asked Questions
What is the Nudge campaign?
The Nudge campaign is an initiative by the CBDT encouraging taxpayers to voluntarily review and amend potentially ineligible deduction claims identified through data analytics.
What are the deadlines for filing revised ITRs?
Taxpayers must file revised ITRs by December 31, 2025, or can file updated returns from January 1, 2026, with additional tax liabilities.
What types of claims are being flagged?
Claims involving bogus donations to Registered Unrecognised Political Parties (RUPPs) and other ineligible deductions are being flagged.
How will taxpayers be notified?
Taxpayers will receive SMS and Email advisories on their registered mobile numbers and email addresses.
Where can I find more information on this campaign?
Additional information is available at www.incometax.gov.in regarding deduction provisions and filing updated returns.
