Tax reforms lead to 1.32 cr updated ITRs, ₹16,083 cr additional tax, says CBDT member; key initiatives listed

More than 1.32 crore updated returns had been filed over the past four years, resulting in additional tax payments of ₹16,083 crore under the tax department's NUDGE campaign, Pallavi Agarwal, member of the Central Board of Direct Taxes (CBDT), said at a press conference in Bengaluru on Monday.

The initiative, first introduced in 2024, uses data analytics, behavioural insights and digital communication to identify taxpayers whose income tax returns (ITRs) may contain discrepancies, such as under-reporting of income, non-disclosure of assets or excessive deduction claims.

Instead of immediately initiating scrutiny proceedings, the income tax department sends targeted communications to taxpayers, asking them to review their filings and revise or update them, if necessary.

What initiatives were taken to improve compliance?

Since April 2026, the income tax department has conducted 304 outreach programmes across the country, Agarwal was quoted as saying by PTI.

These sessions were conducted in English, Hindi, and regional languages, with an aim of familiarising taxpayers, professionals, and other stakeholders with the Income Tax Act, 2025, Income Tax Rules, 2026, and the redesigned tax forms.

The CBDT member also said that the new tax framework is aimed at reducing the compliance burden, providing greater clarity and certainty, and making tax administration more citizen-centric, technology-driven and efficient.

The new tax regime has also seen a significant rise in adoption. For Assessment Year 2026-27, more than 97% of ITR-1 and over 95% of ITR-2 returns were filed under the new regime. The income tax department has also added 49 lakh first-time filers by July 31, 2026, according to the news report.

Of the returns furnished up to August 31, 2026, 2.54 crore, or 32.48%, were processed within one day of filing, while tax refunds were issued for around 65 lakh returns, showing how technology-led tax administration has substantially improved processing efficiency.

The income tax department currently interfaces with around eight crore taxpayers and collects nearly 600 crore transaction details through mechanisms such as TDS (tax deducted at source), Statement of Financial Transactions (SFT), and the Annual Information Statement (AIS).

How the NUDGE campaign works

NUDGE, short for Non-intrusive Usage of Data to Guide and Enable, marks a shift in the tax department's compliance strategy from post-facto enforcement to preventive, technology-enabled interventions.

Taxpayers are shortlisted using advanced risk analysis that identifies possible mismatches between reported income and information available with the department. These may include unreported assets or income, incorrect deduction claims, excess exemptions or inconsistencies flagged through third-party data.

The campaign follows the CBDT's SAKSHAM framework, a seven-stage compliance strategy covering data collection, risk analysis, targeted communication, taxpayer assistance, transparency and continuous evaluation.

The income tax department has also carried out nationwide awareness programmes, which was also mentioned by the CBDT member. This involves employers to encourage taxpayers to voluntarily rectify discrepancies by filing revised, belated or updated returns.