By CA Surekha S Ahuja
Not a Notice. Not Routine. A Final Compliance Signal.”
Data may not accuse. But it rarely alerts without cause.
After intensifying scrutiny on foreign assets and offshore income, the Income-tax Department has now formally shifted focus to domestic deduction and exemption claims through a CBDT press release dated 23 December 2025.
This communication, issued under the NUDGE (Non-Intrusive Usage of Data to Guide and Enable) framework, is not a statutory notice.
But professionally, it must be read as a pre-enforcement compliance alert.
What Has Triggered This NUDGE
The Department has openly acknowledged that advanced risk analytics have already identified specific returns—particularly for AY 2025–26, with spill-over analytics for earlier years.
The risk markers include:
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Ineligible or excessive deduction / exemption claims
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Bogus or doubtful donations, including to Registered Unrecognised Political Parties (RUPPs)
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Invalid or mismatched PANs of donees
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Errors in computation limits or conditions
This is not random outreach.
It is return-specific, data-validated shortlisting.
Why This Communication Matters
Historically, advisories were generic.
This one is targeted, quantified and outcome-driven.
CBDT itself has disclosed that:
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Over 21 lakh returns for AYs 2021–22 to 2024–25 have already been revised
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More than ₹2,500 crore in additional tax has been voluntarily paid
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Over 15 lakh revisions have already occurred for AY 2025–26
This is no longer policy experimentation.
It is institutionalised compliance enforcement through voluntary correction.
The Legal Importance of 31 December 2025
Just as with foreign asset disclosures, 31 December 2025 is a hard statutory boundary.
Up to 31 December 2025
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Revised return permissible
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No additional tax
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Lower litigation and penalty exposure
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Strong presumption of bonafide correction
From 1 January 2026
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Only Updated Return (Section 139(8A)) possible
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Mandatory additional levy
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Weaker defence against penalty allegations
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Higher scrutiny probability
The message is unambiguous:
Correct now, while law still presumes good faith.
Scope Is Multi-Year — Not Limited to AY 2025–26
Although the press release references AY 2025–26, CBDT has clearly stated that:
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Analytics cover AY 2021–22 to AY 2024–25
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Past behaviour is being evaluated for consistency
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Patterns, not isolated claims, are now decisive
A single incorrect deduction today may reopen credibility for multiple years.
An Important Safeguard — Often Misread
CBDT has expressly clarified:
Taxpayers whose deduction or exemption claims are genuine and correctly made in accordance with law are not required to take any action.
This is significant—but conditional.
In today’s regime:
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A genuine claim without documentation is vulnerable
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Silence without preparedness is no longer safe
Professional Advisory — What Taxpayers Should Do Now
This is not the time for:
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Blanket revisions
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Panic withdrawals of valid deductions
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Mechanical compliance
This is the time for:
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Section-wise eligibility re-validation
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Verification of donee status, PAN and approval
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Limit and computation review
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AIS / TIS reconciliation
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Strategic decision on whether revision is legally necessary or professionally avoidable
Precision matters more than speed.
Consequences of Inaction
If discrepancies are later established:
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Disallowance becomes automatic
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Interest under sections 234B / 234C follows
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Penalty exposure under Section 270A becomes defensible
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Donation cases may invite intent-based allegations
The NUDGE phase is the lowest-cost exit from this enforcement cycle.
The Larger Compliance Message
Read together with the Department’s parallel action on foreign assets, the message is clear:
Data identifies first.
Voluntary compliance follows.
Law enforces only if required.
Those who respond now will likely never hear back.
Those who ignore it may enter formal assessment territory with limited defences.
This is not about fear.
It is about foresight.
