New Delhi, Dec. 25 -- India's tax administration is gradually moving away from an enforcement-heavy approach towards one that encourages voluntary compliance. A key step in this transition is the Central Board of Direct Taxes' (CBDT) NUDGE initiative-short for Non-intrusive Usage of Data to Guide and Enable taxpayers.

Rolled out in phases from 27 November, NUDGE-1 focused on disclosures of foreign assets and income, while NUDGE-2 expanded the scope to domestic income.

Using data analytics, the system sends alerts asking taxpayers to review possible mismatches in their income tax returns (ITRs), reflecting the philosophy of "trust first, scrutinize later".

As the 31 December deadline for filing revised returns approaches, many taxpayers...