What is the story about?
With the December 31 deadline approaching, the Income Tax Department has urged taxpayers to review and revise their income-tax returns (ITRs) where required, highlighting that timely corrections can help avoid future disputes, penalties and prolonged scrutiny.
The advisory comes as part of the department’s data-driven “NUDGE” campaign for the assessment year 2025–26, which uses analytics to flag potentially ineligible deduction or exemption claims.
Taxpayers identified under the exercise are receiving SMS and email alerts, encouraging voluntary compliance rather than immediate enforcement.
Why the December 31 deadline is critical?
December 31 marks the last date to file a revised or belated return for AY 2025–26 under the Income-tax Act.
After this date, taxpayers can only file an Updated Return (ITR-U) from January 1, which may involve additional tax outgo and restrictions.
Revising the return before the deadline allows taxpayers to:
What triggered the advisory?
According to the Income Tax Department, analytics under the NUDGE framework identified cases where certain claims may not meet statutory conditions.
These include deductions that require strict eligibility, such as specific donation-related exemptions or benefits claimed without matching disclosures.
The department clarified that the outreach is non-intrusive and advisory. Taxpayers with valid and compliant claims do not need to take any action.
Why revising now helps taxpayers
Tax experts note that revising returns before December 31 gives taxpayers greater control. A voluntary revision typically:
Officials have also stressed that voluntary correction demonstrates good-faith compliance, which remains a key focus of the department’s current tax administration approach.
The advisory comes as part of the department’s data-driven “NUDGE” campaign for the assessment year 2025–26, which uses analytics to flag potentially ineligible deduction or exemption claims.
Launch of a data-driven NUDGE campaign for AY 2025–26 encouraging taxpayers to voluntarily review deduction/exemption claims identified as potentially
ineligible through risk analytics.
The outreach is advisory and reflects a trust-first approach, enabling voluntary correction,… pic.twitter.com/8pXqXL2PMe
— Income Tax India (@IncomeTaxIndia) December 23, 2025
Taxpayers identified under the exercise are receiving SMS and email alerts, encouraging voluntary compliance rather than immediate enforcement.
Why the December 31 deadline is critical?
December 31 marks the last date to file a revised or belated return for AY 2025–26 under the Income-tax Act.
After this date, taxpayers can only file an Updated Return (ITR-U) from January 1, which may involve additional tax outgo and restrictions.
Revising the return before the deadline allows taxpayers to:
- Correct incorrect deduction or exemption claims
- Align declared income with AIS/Form 26AS data
- Rectify errors related to donations, investments or exemptions
- Reduce the risk of future notices or adjustments
What triggered the advisory?
According to the Income Tax Department, analytics under the NUDGE framework identified cases where certain claims may not meet statutory conditions.
These include deductions that require strict eligibility, such as specific donation-related exemptions or benefits claimed without matching disclosures.
The department clarified that the outreach is non-intrusive and advisory. Taxpayers with valid and compliant claims do not need to take any action.
Why revising now helps taxpayers
Tax experts note that revising returns before December 31 gives taxpayers greater control. A voluntary revision typically:
- Limits exposure to penalties and interest
- Prevents escalation into assessment or scrutiny proceedings
- Helps ensure faster processing of refunds
- Avoids complications that may arise under the updated-return route
Officials have also stressed that voluntary correction demonstrates good-faith compliance, which remains a key focus of the department’s current tax administration approach.
