Summary of this article
NUDGE promotes voluntary tax compliance.
Rs 8,800 crore additional taxes collected.
Model may expand across departments.
The Income-Tax Department's NUDGE -- a technology-enabled campaign to prompt taxpayers to pay dues before initiating penal procedures -- could be adopted by various other government departments like the CBIC to improve governance, CBDT Chairman Ravi Agrawal has said.
"The NUDGE should just not be perceived as only relevant to tax administration. It should be actually a principle that should cut across governance.
"You are actually sensitising a person for compliance, and it's a behavioural economics concept, and we have now formalised this concept," Agrawal told PTI.
We bring it to the notice of the taxpayer that our system shows there is some "gap" in their tax-related compliance, and if you also feel that there is a gap, then we will not ask any questions, go ahead update your return, pay additional tax and be done with it, he explained.
Asked if the CBDT has shared its NUDGE model with other government departments, Agrawal said, "We have started sharing...and the Central Board of Indirect Taxes (CBIC) may be adopting it in some way and other departments may be doing it in their own way..." The Central Board of Direct Taxes (CBDT) is the policy-making body for the Income-Tax Department.
Agrawal said the concept of nudge and the positives obtained from it was also mentioned in the latest Economic Survey, while the global economic and social policy promotion body -- Organisation for Economic Cooperation and Development (OECD) -- has mentioned the "benefits" obtained by the Indian I-T Department through this campaign.
NUDGE stands for Non-Intrusive Usage of Data to Guide and Enable, and the CBDT has carried out two campaigns under this banner till now -- first in November 2024 for taxpayers who had undisclosed foreign assets for the assessment year 2024-25, and the second such campaign was launched in November last year for AY 2025-26.
Agrawal, during a post-Budget interview last week, said that about 1.1 crore of revised and updated returns were filed over the past two years, resulting into collection of about Rs 8,800 crore in additional taxes as well as the reversal of refund claims worth Rs 1,750 crore last year with the help of the NUDGE initiative.
The CBDT chief said that NUDGE, a technology-enabled exercise, in turn, stands on the "seven limbs" of the SAKSHAM framework.
SAKSHAM, he said, stood for Sankalan (Hindi for collection of information), Anusandhan (research), Kriyanvayan (execution), Sampark (contact), Hastak (hand-holding), Adhikar (right) and Mulyankan (analysis).
This (SAKSHAM) encourages the I-T Department assessing officers to use data (sent by reporting entities like banks, etc.) for better communication to foster voluntary compliance by taxpayers.
"So, Saksham makes Nudge effective...it can be called the backbone of Nudge.
"Therefore, Nudge is not only a simple one-off exercise. It has to be done in a continuum. It has to be there, and you need to identify gaps at regular intervals, keep on prompting people," the CBDT boss said.
