Nudge Campaign Improves Tax Compliance: Economic Survey

New Delhi, Jan 29 (PTI) The Income Tax department's Nudge campaign has improved tax collection efficiency by shifting the focus from post-facto enforcement to preventive, technology-enabled compliance, the Economic Survey said on Thursday.

Data-driven nudges have improved third-party reporting and accuracy in TDS filings, the survey tabled in Parliament said.

More than 8,500 deductors revised their TDS returns, adding over 1.08 crore deductees and bringing additional TDS of nearly Rs 4,825 crore into the system, it noted.

The tool also helped to identify non-genuine agricultural income of Rs 2,038.02 crore from 310 entities and capital gains of Rs 33,057.28 crore earned through offer-for-sale (OFS) by promoters during initial public offers.

The campaign has reduced friction, litigation, and compliance costs for taxpayers and administration, while increasing revenue through voluntary means. By combining data, behavioural insights, and transparent communication, nudge-based tax administration represents a modern, efficient, and citizen-centric approach to revenue mobilisation.


"Overall, the Nudge initiative has improved tax collection efficiency by shifting the focus from post-facto enforcement to preventive, technology-enabled compliance," the survey authored by Chief Economic Advisor V Anantha Nageswaran and his team said.

The Income Tax department had launched the first Nudge campaign on November 17, 2024, targeted select taxpayers who had been reported by foreign jurisdictions under the Automatic Exchange of Information (AEOI) framework as holding foreign assets that were not disclosed in their Income Tax Returns (ITRs) for AY 2024-25.

The initiative yielded positive outcomes, with 24,678 taxpayers (including several not directly nudged) revisiting their returns and disclosing foreign assets amounting to Rs 29,208 crore, along with foreign-source income of Rs 1,089.88 crore.

On November 28, 2025, the tax department launched the second Nudge campaign, under which SMSs and emails were sent to high-risk taxpayers where foreign assets appear to exist, but have not been reported in the ITRs filed for AY 2025-26. Such taxpayers were advised to revise their returns on or before December 31, 2025, to avoid penal consequences. PTI JD JD BAL

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