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Jan 29, 2026
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Economic Survey 2026: A clever hack is rewriting India’s tax playbook
India’s tax administration is quietly undergoing a structural shift from a system dominated by audits and penalties to one that relies on behavioural insights, data analytics and voluntary compliance. The Economic Survey 2025–26 points to the growing use of “nudges” by the Income Tax Department as a key factor behind improved tax collection efficiency, reduced litigation and higher taxpayer participation.
Drawing from behavioural economics, the Survey argues that timely information and gentle prompts can often achieve better outcomes than coercive enforcement, particularly in a digitally tracked economy.
Economic Survey 2026: The NUDGE Framework
At the heart of this approach is the NUDGE framework—Non-intrusive Usage of Data to Guide and Enable—which uses large-scale data analytics to identify potential non-compliance and prompt corrective action before formal enforcement begins. As the Survey explains, the approach “focuses on influencing taxpayer behaviour through timely information, gentle prompts, and data-driven insights rather than coercive enforcement,” allowing taxpayers to voluntarily revise or update filings.
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