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Tax Department Puts Some Refunds on Hold as NUDGE Flags Mismatches

Taxpayers flagged by data analytics are urged to file revised returns by December 31 to avoid extra tax under the updated-return route.

Overview

  • CBDT says targeted SMS and email advisories under the Non-intrusive Usage of Data to Guide and Enable campaign ask select filers to review potentially ineligible deduction and exemption claims for AY 2025–26.
  • More than 15 lakh ITRs have been revised for the current assessment year, and over 21 lakh updated returns for prior years have yielded over Rs 2,500 crore in taxes, according to official data.
  • Refunds on flagged returns are paused—not cancelled—pending correction or explanation of issues such as Form 16 mismatches on HRA/80C/80D/LTA, bogus donations to RUPPs, TDS/AIS gaps, or non-disclosure of foreign assets.
  • Taxpayers report texts without matching emails and portal inconsistencies, while the department says genuine, correctly claimed deductions require no action.
  • From January 1, 2026, corrections must be made via an Updated Return (ITR-U) with additional tax; reporting also cites analytics flagging over 2 lakh suspicious deduction cases worth nearly Rs 5,500 crore.