CBDT Launches Second NUDGE Campaign, Advises High-Risk Taxpayers to Revise ITRs by December 31
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The Central Board of Direct Taxes (CBDT) has announced the launch of the second phase of its “NUDGE” campaign, aimed at guiding high-risk taxpayers to correct their income-tax returns. Beginning November 28, SMS and email alerts will be sent to taxpayers whose foreign assets appear to be underreported or not disclosed in their ITRs for the assessment year 2025-26. Taxpayers have been advised to review and revise their returns before December 31, 2025 to avoid penalties.
Background: What Triggered the Second NUDGE Campaign
CBDT’s analysis of Automatic Exchange of Information (AEOI) data for FY 2024-25 identified taxpayers who may possess foreign assets that do not match the disclosures in their filed returns. These discrepancies were flagged using global data shared by foreign jurisdictions under international tax-information agreements. As foreign asset reporting is mandatory under Indian tax laws, CBDT initiated another round of alerts to help taxpayers voluntarily correct errors.
Focus on Reporting Foreign Assets and Income
The campaign specifically encourages accurate reporting in Schedule Foreign Assets (FA) and Schedule Foreign Source Income (FSI) of income-tax returns. Taxpayers receiving alerts will be asked to revisit their filings and disclose overseas bank accounts, financial interests, immovable property, trusts, and any income sourced from outside India. CBDT has emphasised that complete and correct reporting is essential to comply with the Income-tax Act, 1961 and the Black Money Act of 2015.
Results From the First NUDGE Campaign
The first NUDGE campaign, launched on November 17, 2024, targeted taxpayers flagged under the AEOI system for not reporting foreign assets in their ITRs for AY 2024-25. The initiative delivered strong results, with 24,678 taxpayers revising their returns. These revisions led to the disclosure of foreign assets worth Rs 29,208 crore and foreign-sourced income of Rs 1,089.88 crore. Several taxpayers who were not directly notified also voluntarily updated their filings after the campaign.
A Data-Driven and Non-Intrusive Approach
The Finance Ministry stated that the NUDGE initiative reflects India’s push toward trust-based and technology-enabled tax administration. CBDT uses advanced data analytics to reduce information gaps and simplify compliance. The campaign supports the goal of Viksit Bharat by promoting transparency, accountability, and voluntary compliance among taxpayers. The department aims to maintain a non-intrusive model that encourages taxpayers to correct errors without fear of heavy scrutiny.
Why This Matters for Taxpayers
Foreign asset reporting remains one of the most sensitive areas of tax compliance. With India receiving detailed financial information from multiple jurisdictions, undisclosed foreign assets can lead to significant penalties. The NUDGE campaign helps taxpayers avoid legal consequences by offering an early opportunity to revise returns. CBDT has advised all eligible individuals to act promptly and ensure complete compliance before the deadline.
Final Thoughts from TheTrendingPeople.com
CBDT’s second NUDGE campaign reflects a clear shift toward proactive, technology-led tax governance in India. By alerting high-risk taxpayers early and encouraging voluntary compliance, the tax department aims to create a transparent system that reduces disputes and strengthens trust. The strong results from last year’s campaign show that data-driven monitoring can significantly improve reporting accuracy, particularly in sensitive areas like foreign assets and overseas income. As India expands its tax-information partnerships globally, timely and accurate disclosures will become even more important. Taxpayers are encouraged to revise returns at the earliest and ensure full compliance with statutory requirements.