New Delhi: The Income Tax Department has started sending 'NUDGE' tax notices to a large number of taxpayers. The aim is not to punish, but to help people correct possible mistakes in their Income Tax Returns (ITR).
NUDGE stands for Non-intrusive Usage of Data to Guide and Enable. This means it is not a raid or penalty notice. It is more like an advisory message. It tells taxpayers that there may be a mismatch between the details in their ITR and the data available with the department.
The idea is to give people a chance to review and fix errors before any strict action is taken.
Why Are These Notices Sent?
The department now uses risk analytics and third-party data to check tax filings. It compares information from the Annual Information Statement (AIS), banking records, investments, and other financial data with what a person has declared in the ITR.
If there is a mismatch, the system flags the case and sends a NUDGE notice.
This campaign mainly focuses on people earning more than Rs 50 lakh annually and those holding key management roles in companies. Common issues include:
- Under-reporting income
- Claiming wrong deductions
- Not reporting high-value transactions
- Differences in asset details
What Should You Do If You Receive One?
First, do not panic. A NUDGE notice is not final action.
Experts suggest checking your ITR and matching it carefully with your AIS. If you find a mistake, you can file a revised or updated ITR. If extra tax is due, it is better to pay it early. This can help avoid future penalties or scrutiny.
What Should You Avoid?
Do not ignore the notice. Many people treat it as a simple message and take no action. This can lead to deeper investigation later.
Also, do not reply in haste without checking your records. Giving wrong information can create more problems.
A Part of Data-Driven Compliance
This initiative is part of the government’s data-driven and trust-based compliance model. A previous NUDGE campaign in November 2024 focused on undeclared foreign assets. Thousands of taxpayers updated their returns after that.
Now, the scope has expanded to cover wrong deductions, high-value transactions, and AIS mismatches.
In simple words, a NUDGE notice is more of a warning and an opportunity. If you receive one, check your data, correct errors if needed, and stay compliant to avoid trouble later.
