The Income Tax Department has rolled out a proactive compliance initiative dubbed the ‘NUDGE’ Campaign, directly targeting high-risk taxpayers for the disclosure of foreign assets. While framed as a cooperative measure, this campaign holds critical implications for High Net-worth Individuals (HNIs) and large business owners, particularly those in export-heavy regions like Odisha’s mining, steel, and commodity sectors who routinely engage in international transactions.
What is the ‘NUDGE’ Campaign All About?
For those unfamiliar with the term, the ‘NUDGE’ campaign is the department’s sophisticated way of moving from reactive enforcement (investigating after the fact) to proactive persuasion. Instead of immediately issuing a severe scrutiny notice, the IT Department utilizes powerful data analytics and information gathered through international agreements—such as the Common Reporting Standard (CRS)—to cross-reference taxpayer filings against global data on assets and transactions.
If a discrepancy is found (e.g., the department has data on a foreign bank account or property you own, but it’s missing from your Income Tax Return), the department sends a gentle “nudge”—a communication (email or preliminary notice) asking the taxpayer to voluntarily review their return and correct the omission. The fundamental goal is to give taxpayers an opportunity to achieve compliance before the department initiates a costly and punitive formal investigation. It operates on the principle of ‘comply now, or face scrutiny later.’
Current Scope: The Scale of the Nudge
The campaign is not just a warning; it is already massive in scale. The Central Board of Direct Taxes (CBDT) has officially stated that approximately 25,000 high-risk taxpayers across India are receiving these alerts in this current phase, which commenced from November 28, 2025. This shows the seriousness and reach of the initiative.
The Market Buzz :
Currently, the campaign is generating significant buzz among tax consultants and compliance circles. The market view is that the IT Department is now leveraging the full power of global data sharing. Prior to this, tracking foreign assets was complex; now, information on assets held by Indian residents across dozens of jurisdictions is being received automatically.
The Proven Success of the Nudge:
The department’s commitment is backed by tangible results. The CBDT has revealed that the first phase of the campaign, launched in 2024, prompted 24,678 taxpayers to revise their returns, leading to the disclosure of foreign assets worth over ₹29,208 Crore and foreign-source income of over ₹1,089 Crore. This demonstrates the campaign’s high success rate in bringing undeclared wealth into the tax net.
Why this is crucial advisory content for Odisha:
- Export Reliance: Odisha’s economy is heavily dependent on the export of minerals, steel, and aluminum. Companies and their promoters routinely deal with foreign currency transactions, maintaining overseas accounts, and structuring investments abroad.
- Increased Scrutiny: Data analysis shows taxpayers involved in significant international trade are inherently labeled as “high-risk” for the purposes of foreign asset disclosure. The ‘NUDGE’ is essentially a targeted warning for this demographic in Bhubaneswar and other industrial hubs.
Our Insight: A Call for Immediate Action
The insightful takeaway from this campaign is that the era of passive, hope-for-the-best compliance is over. The tax department has the data, and the ‘NUDGE’ is a goodwill gesture—but one that comes with a deadline.
For any HNI or business owner, immediate action should involve a thorough audit of the following key compliance schedules:
- Schedule FA (Foreign Assets): Ensure every foreign bank account, property, security, or financial interest is accurately declared in your current and previous Income Tax Returns (ITR).
- Form 15CA/15CB: Scrutinize all details related to remittances made outside India to ensure they align perfectly with your declared income.
The Bottom Line: Voluntary compliance prompted by the ‘NUDGE’ campaign is far less costly and complex than dealing with a mandatory scrutiny notice. For business leaders in Bhubaneswar, the ‘NUDGE’ should be treated as a critical, time-bound opportunity to ensure their international financial footprint is fully compliant with Indian tax law.
