CBDT Nudges Taxpayers on Bogus Donation Claims for AY 2025-26

Press Release, dated 13-12-2025

1. Background

The Central Board of Direct Taxes (CBDT) has launched a targeted NUDGE (Non-intrusive Usage of Data to Guide and Encourage) campaign aimed at taxpayers who have claimed deductions for donations to suspicious entities or have not furnished adequate information to establish the genuineness of such entities.

The initiative forms part of CBDT’s broader strategy to encourage voluntary compliance through data-driven nudges, rather than immediate enforcement action.

2. Data-Driven Identification of High-Risk Claims

CBDT has strengthened its advanced data analytics and risk-profiling systems to detect potentially incorrect or abusive claims at an early stage.

Key Findings from Data Analytics

Analysis indicated that:

• Several taxpayers may have claimed deductions for donations made to entities flagged as suspicious, or
• Failed to provide relevant details necessary to verify the genuineness of the donee institutions

These patterns were identified as high-risk behaviour indicators, prompting targeted outreach instead of blanket scrutiny.

3. Targeted NUDGE Campaign – Taxpayer-Friendly Approach

Rather than initiating immediate assessment or penalty proceedings, CBDT has adopted a soft-touch compliance approach.

Key Features of the Campaign

• Personalised SMS and email advisories are being sent to identified taxpayers
• Communication is sent to registered mobile numbers and email IDs
• Taxpayers are given an opportunity to review and voluntarily correct their returns
• The campaign encourages taxpayers to:

1. 1. Update their Income-tax Returns (ITRs), and
   2. Withdraw incorrect or ineligible donation claims, if any

This approach aims to promote self-correction and voluntary disclosure.

4. Importance of Updated Contact Details

CBDT has emphasised that taxpayers must ensure:

• Correct and active mobile numbers
• Valid email IDs

are provided in their filings and on the Income-tax portal.

Accurate contact details are essential to:

• Receive timely advisories and compliance nudges
• Avoid missing important communications that could otherwise lead to subsequent scrutiny or enforcement action

5. Regulatory Intent

The campaign reflects CBDT’s intent to:

• Leverage technology and analytics for preventive compliance
• Reduce litigation and administrative burden
• Distinguish between genuine errors and deliberate tax abuse
• Encourage taxpayers to regularise mistakes without fear of immediate penal consequences

It also serves as a deterrent against misuse of donation-based deductions, particularly where donee entities may not meet statutory conditions.

6. Key Takeaways for Taxpayers

Taxpayers should:

• Review donation-related deductions claimed in their ITRs
• Verify the eligibility and genuineness of the donee institutions
• Respond promptly to any SMS or email advisories from CBDT
• File updated returns where incorrect claims have been made
• Ensure contact details are current on the Income-tax portal

Failure to act on such nudges may result in closer scrutiny, reassessment, or penalty proceedings at a later stage.

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