The **NUDGE** (Non-intrusive Usage of Data to Guide and Enable) campaign represents a major shift in India’s tax administration, moving away from aggressive audits toward a behavioral, data-driven approach.

According to the **Economic Survey 2025-26** (tabled on January 29, 2026), the Income Tax Department has successfully recovered hundreds of crores by simply "nudging" taxpayers to correct their own mistakes.

### How the Nudge Campaign Works

The campaign is built on the principles of behavioral economics—assuming that many errors are unintentional rather than malicious. Here is the workflow:

1. **Data Harvesting:** The department uses advanced analytics to cross-reference your ITR with the **Annual Information Statement (AIS)**, **Form 26AS**, and international data from **FATCA** (US) and **CRS** (100+ countries).

2. **Identifying Mismatches:** AI flags discrepancies—such as HRA claims that don't match the landlord's reported income, or foreign bank accounts not mentioned in Schedule FA.

3. **The "Gentle Prompt":** Instead of a formal scrutiny notice, you receive an **SMS or email**. It basically says: *"We noticed a discrepancy; please review your return and revise it if necessary."*

4. **Voluntary Correction:** You are given a window (often until December 31) to file a **Revised or Updated ITR**. Doing so allows you to pay the correct tax and avoid the heavy penalties or prosecution that follow a formal audit.

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### Key Results (FY 2025-26)

The strategy has proven highly effective across several specific "tax leak" areas:

| Category | Impact / Result |

| --- | --- |

| **Wrong HRA Claims** | **Rs 119 crore** recovered from taxpayers who claimed ineligible House Rent Allowance. |

| **Foreign Income** | **24,678 taxpayers** filed revised returns, declaring **Rs 1,000+ crore** in foreign income and **Rs 29,208 crore** in foreign assets. |

| **Political Donations** | Over **91,000 taxpayers** revised returns for Section 80GGC, reducing excessive claims by **Rs 2,050 crore**. |

| **TDS Revisions** | 8,500+ deductors added 1.08 crore new deductees, bringing in **Rs 4,825 crore** additional tax. |

| **Suspected Scams** | Flagged **Rs 2,038 crore** in non-genuine agricultural income and **Rs 33,057 crore** in IPO-related capital gains. |

### Why This Matters for You

If you receive a "nudge," it’s a golden opportunity to settle your taxes quietly. Ignoring these prompts usually leads to the department upgrading the case to a **formal scrutiny**, where penalties can be as high as **200%** of the tax evaded—especially under the **Black Money Act** for undisclosed foreign assets.

**Would you like me to explain the specific documents you should keep ready to justify your HRA or foreign asset claims?**