Big alert from Income Tax Department! Thousands of taxpayers received NUDGE notice, know what this is?

Nudge Notice: The Income Tax Department has recently sent ‘NUDGE’ notices to a large number of taxpayers, which has created a stir among many people. However, there is no need to panic. This notice is not for strict action, but to give you an opportunity to correct possible mistakes in your filed Income Tax Return (ITR). NUDGE stands for ‘Non-Intrusive Use of Data to Guide and Enable’. In simple words, this is a message letting you know that some discrepancies have been found between your return and the financial data available with the department.

Purpose of NUDGE

The main objective of this notice is to give taxpayers an opportunity to review their data. If any mistake is found, the department gives you time to correct it yourself. With this process, heavy fines or legal action can be avoided in future. This should not be taken as a legal summons or penal notice.

Digital way to increase tax compliance

In the modern digital era, the Income Tax Department has more information about financial transactions. The department uses risk analytics and Artificial Intelligence (AI) to identify where potential mistakes lie. For example, if large expenses are visible in your AIS (Annual Information Statement) but low income is recorded in your ITR, the system immediately generates a flag and sends you a NUDGE notice.

What are the main objectives of the notice?

This time the Income Tax Department is especially paying attention to the following categories:

1. High-income taxpayers – Those whose annual income is ₹ 50 lakh or more.
2. Corporate officers – Management officers of companies who take financial decisions.
3. Those with foreign assets – Those who did not show their foreign income or assets in ITR.
4. Those with data mismatch – those who have a big difference between their banking transactions and declared income.

Steps to be taken after receiving NUDGE notice

If you receive such a notice on email or mobile, take the following action:

Check AIS and TIS: Download Annual Information Statement and Taxpayer Information Summary by logging into your Income Tax Portal.
Check from ITR: Check whether the information about your savings account interest, dividend, property sale etc. has been filled correctly in the ITR or not.
Correct the mistake: If any income has been missed or any deduction has been wrongly claimed, file a revised ITR immediately.
Paying more tax: If tax is payable, it would be wise to deposit it along with interest. With this, penalties can be avoided in future.

Thus, the NUDGE notice is only a caution and an opportunity for improvement, and not a reason to fear. By taking action at the right time, you can keep your tax records clean and safe.

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