CBDT’s ‘Saksham Nudge’ campaign on tax audit report: Email alerts sent to 12 thousand professionals, October 21 is the last date for correction

The Central Board of Direct Taxes (CBDT) and the Income Tax Department have launched a special campaign regarding tax audit compliance of the financial year. This campaign has been named ‘Saksham Nudge Campaign’. The department’s Artificial Intelligence (AI) and advanced data analytics tools have detected wide-scale technical and factual flaws in tax audit reports. Based on this, ‘Communication Alerts’ have been sent directly to over 12,000 Chartered Accountants (CAs), tax professionals and concerned taxpayers across the country through email messages and on the e-filing portal. The department has set a deadline of October 21, 2026 to immediately rectify the discrepancy between the details recorded in the audit report and the actual financial transactions.

Traditionally the Income Tax Department has been directly initiating investigation on any discrepancy through Show Cause Notice or under Section 148. However, under the ‘Nudge Theory’ the department has decided to adopt a corrective approach and give a chance to taxpayers and professionals before taking coercive legal action. The objective of the ‘Saksham’ campaign is to ensure that in case of inadvertent clerical errors, filling of data in wrong columns or omission of details in the audit report, the professionals themselves come forward and get it amended. The message of CBDT is clear that if the reconciliation of data is not corrected by the stipulated date, then the department will bring the concerned cases under scrutiny and heavy penalty will be imposed.

The email alerts issued by the Income Tax Department are mainly related to audit of charitable, religious trusts, educational institutions, medical institutions and non-profit organizations (NGOs) registered under section 12A/12AB or 10(23C).

According to the department, irregularities have mainly come to light in these two forms:

• Form 10B: For large trusts and institutions whose annual income exceeds ₹5 crore, or which have received any foreign contribution during the financial year, or which have utilized any funds outside India.

• Form 10BB: For trusts and institutions whose total income is up to ₹5 crore and which have not made any foreign donations or foreign expenditure.

The department’s analysis found that many institutions selected the wrong form based on their income and foreign contribution limit. Additionally, several discrepancies have been noted in compliance with TDS deduction rules, disclosure of cash payments exceeding ₹10,000 under section 40A(3) and utilization of prescribed 85% of income for charitable purposes.

The Income Tax Department has alerted professionals and trusts that this accelerated option of filing revised audit reports will stop after the expiry of the deadline of October 21, 2026. If an institution or auditor ignores this email alert, it may face the following serious consequences:

1. Cancellation of Tax Exemption: Tax exemption under Sections 11 and 12 is valid only if valid audit reports are filed on time. Due to incorrect or incomplete reporting, the entire gross receipts of the trust may be treated as ordinary business income and heavily taxed at the maximum marginal rate (MMR) of 30%.

2. Heavy penalty under Section 271B: 0.5% or maximum of total sales, turnover or gross receipts for non-submission of correct audit report within prescribed time as per Section 271B of Income Tax Act ₹1,50,000 A fine of up to Rs.

3. Hindrances in filing revised ITR: The UDIN and acknowledgment number of the Tax Audit Report (TAR) is directly mapped with the Income Tax Return (ITR-7). The return filed on the basis of wrong audit report will be declared as ‘Defective Return’ (Defective Return under Section 139(9)).

Professionals receiving the email by CBDT have been advised to take the following procedural steps without panic:

• Check ‘Compliance Portal’ on e-filing portal: Login with your e-filing credentials and go to ‘Compliance Portal’ or ‘e-Campaign’ tab under ‘Pending Actions’. View details of the specific mismatch flagged by the department there.

• Re-evaluation of Form Selection: Check whether the total receipts of the trust were within or outside the ₹5 crore limit, and whether there were any FCRA or foreign contributions. If Form 10B was required in place of Form 10BB, upload the correct form afresh.

• Updates on UDIN portal of the Institute (ICAI): Before issuing the new revised audit report, register the reasons regarding the old report on the UDIN portal of ICAI and generate a new UDIN for the new revised report and authenticate the same on the Income Tax portal within 15 days.

• Submit Response: If the CA or the taxpayer believes that the information given in their original report is completely correct as per the rules, they can submit their due clarification along with the documents by choosing the option of ‘Disagreement’ on the portal.

This campaign shows that the Income Tax Department is now moving beyond paper-based compliance to a completely data-driven system. Direct cross-verification of Annual Information Statement (AIS), Taxpayer Information Summary (TIS), GST returns and banking transactions is being done with the data entered in the audit forms. Professionals and trust management should rectify these errors by 21st October to make their compliance 100% flawless to avoid any kind of penal action and tax notices in future.