CBDT Requests Taxpayers to Correct Ineligible Deduction Claims Before December Deadline

The Central Board of Direct Taxes (CBDT) has reminded taxpayers to verify and correct their income tax returns (ITRs) to eliminate any ineligible deductions or exemptions for Assessment Year (AY) 2025-26 before December 31, 2025. This is part of its trust-based NUDGE framework to simplify tax compliance. 

CBDT’s NUDGE Campaign Promotes Voluntary Correction 

CBDT's initiative, titled "Non-intrusive Usage of Data to Guide and Enable" (NUDGE), involves identifying instances where deductions or exemptions have been incorrectly claimed, leading to understatement of income.  

These errors include use of invalid or incorrect PANs, excessive deduction amounts, and bogus donations to Registered Unrecognised Political Parties (RUPPs). 

The department stated that it has detected ineligible claims through its risk management and advanced data analytics systems. Taxpayers whose exemption or deduction claims are valid are not required to take any action. 

Updated and Revised Returns See Substantial Response 

According to the CBDT, more than 21,00,000 taxpayers have already filed updated returns across AY 2021-22 to AY 2024-25 and collectively paid over ₹2,500 crore in taxes. Additionally, over 15,00,000 revised ITRs have been filed for AY 2025-26 as of now. 

Taxpayers are encouraged to review their ITRs ahead of the December 31 deadline to revise any inaccuracies, thereby avoiding departmental notices or scrutiny at a later stage. 

Read More: Income Tax Dept Deploys Data Analytics NMS to Track High-Value Transactions of Non-ITR Filers! 

Updated Return Filing Allowed from January 1, 2026 

The CBDT clarified that taxpayers who fail to revise their returns before the deadline can still file an updated return starting January 1, 2026, under the existing legal provisions. However, this would be subject to the payment of additional tax liability as applicable. 

Focus on Transparency and Taxpayer Trust 

This move is consistent with the CBDT’s aim to foster voluntary compliance without immediate enforcement. By offering taxpayers a chance to rectify errors independently, the department seeks to minimise litigation and enhance administrative efficiency. 

Conclusion 

CBDT's reminder to correct ineligible claims in ITRs reflects a proactive step to improve tax accuracy. Taxpayers are advised to utilise this opportunity before the December 31, 2025, deadline, unless opting for updated filings in 2026 with added tax liability. 

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