Income Tax Department clarifies why many taxpayers who claim tax deductions, exemptions got intimation emails; know what to do

Dec 23, 2025

Synopsis
The Income Tax Department is alerting taxpayers about potential errors in their tax deduction claims. Through a NUDGE campaign, the department is sending emails and SMS messages. Taxpayers are urged to review their Income Tax Returns and make corrections by December 31, 2025. This voluntary review aims to prevent future inquiries and penalties, as per the Income Tax Department.

The Income Tax Department today (Tuesday, December 23, 2025) clarified that why many taxpayers who claimed tax deductions or exemptions got intimation emails and what they need to do now to avoid any penalty before the revised ITR deadline of December 31, 2025.

The Income Tax Department is asking taxpayers to voluntarily review deduction/exemption claims identified as potentially ineligible through risk analytics.

It is sending SMS and emails to such taxpayers under the "Non-intrusive Usage of Data to Guide and Enable (NUDGE)" campaign, requesting them to correct such errors, ahead of the revised ITR deadline of December 31, 2025.

How Income Tax Department identified wrong claims

The Income Tax Department says that under the risk management framework, and through the use of advanced data analytics, cases for Assessment Year (AY) 2025-26 have been identified.

It says that the framework includes instances where bogus donations to Registered Unrecognised Political Parties (RUPPs) and other ineligible deductions or exemptions appear to have been claimed in the Income-tax Returns (ITRs).

"It has also been observed that, in some cases, either incorrect PANs or invalid PANs of donees have been quoted. Some cases also contain errors relating to the extent of deduction or exemption claimed," the I-T Department said in a press statement.

"It is advised that the concerned taxpayers review their ITRs, verify the correctness of their deduction and exemption claims, and revise their returns, if required, within the prescribed time by 31 December 2025, so as to avoid further enquiries in the matter," the Tax Department said.

What Income Tax Department is doing to intimate such taxpayers

The Income Tax Department has identified taxpayers and is requesting them through SMS and email under the "Non-intrusive Usage of Data to Guide and Enable (NUDGE)" campaign to correct such errors, in view of the December 31, 2025 deadline for filing revised Income Tax Returns (ITRs).

"This initiative reflects a trust-first approach to tax administration, under which taxpayers are provided an opportunity to review their Income-tax Returns (ITRs) and voluntarily correct any ineligible claims, wherever required," the Income Tax Department said, adding that the campaign leverages data analytics and technology to enable a transparent, non-intrusive, and taxpayer-centric compliance environment, with an emphasis on guidance and voluntary compliance.

Who are not required to comply with I-T Department's new order?

The I-T Department says that taxpayers whose deduction or exemption claims are genuine and correctly made in accordance with law are not required to take any further action.

The I-T Department further says that it is clarified that taxpayers who do not avail of this opportunity may still file an updated return from 1 January 2026, as permitted under law, subject to payment of additional tax liability.

Updated ITRs in 3 years

The Income Tax Department informed that during FY 2025-26, more than 21 lakh taxpayers have already updated their ITRs for AYs 2021-22 to 2024-25 and paid more than 2,500 crore in taxes.

In addition, more than 15 lakh ITRs have already been revised for the current assessment year, i.e., AY 2025-26, says the Income Tax Department in its release.

[The Economic Times]