New Delhi, February 9 The Income-Tax Department's NUDGE – a technology-enabled campaign to encourage taxpayers to pay their 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 not just be perceived as relevant only to tax administration. It should actually be a principle that should cut across governance."
"You are actually sensitizing a person to compliance, and it's a behavioral economics concept, and we have now formalized this concept," Agrawal told PTI.
He explained that the department would inform taxpayers that its system shows there is a "gap" in their tax-related compliance, and if they also feel that there is a gap, they can update their returns and pay additional taxes without any questions.
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 – the 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 revised and updated returns were filed over the past two years, resulting in the collection of about Rs 8,800 crore in additional taxes, as well as the reversal of refund claims worth Rs 1,750 crore, with the help of the NUDGE initiative.
The CBDT chief said that NUDGE, a technology-enabled exercise, 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.
