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Jan 31, 2026
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HRA, capital gains, foreign assets: How tax nudges helped govt mop up over Rs 30,000 crore without raids
As the government gears up for the Union Budget 2026-27, the Economic Survey 2025-26 has highlighted a quiet but important shift in India’s tax administration.
The focus is no longer only on scrutiny, audits or penalties. Instead, the tax system is increasingly relying on “nudging compliance” — a softer, data-driven approach that encourages taxpayers to voluntarily correct mistakes and pay the right tax.
For honest taxpayers, this shift matters. It reduces friction, lowers the risk of litigation, and makes compliance simpler and less intimidating.
What does ‘nudging compliance’ mean?
According to the Economic Survey, nudging compliance is anchored in behavioural economics. Under this approach, the Income Tax Department uses timely information, gentle prompts and data insights to influence taxpayer behaviour, instead of coercive enforcement.
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