Income Tax Department has started the strictest investigation on donations given to political parties. Through Advanced Data Analytics and Pattern-Based Analysis, CBDT has identified those taxpayers who made wrong tax deduction and fake refund claims in the name of unrecognized political parties or fake entities.

The investigation revealed that a network of middlemen and agents was active across the country, who filed returns in exchange for commission and showed inflated deductions.

Many taxpayers were not even aware of this. Now Income Tax Department is sending SMS and Email Alerts and has started Nudge Campaign, so that taxpayers can avoid Penalty, Interest or Prosecution by filing Revised Return on time. Notice issued from 12 December 2025.