2 weeks Ago By Srishty Choudhury
Starting April 1, 2026, the Income Tax Department can investigate individuals' digital activities, including social media accounts, emails and online financial platforms, if tax evasion or undisclosed assets are suspected. This provision is part of the proposed Income Tax Bill, which aims to modernise tax investigations to address the increasing digitalisation of financial transactions. Expanded Powers Under Clause 247 Under Clause 247 of the new Income Tax Bill, authorised officers will have the right to override access codes to gain entry into computer systems or virtual digital spaces, such as cloud servers, emails and social media accounts.
They can also physically break open locks on safes, lockers or doors if they suspect concealed assets or undisclosed income. These measures represent a significant expansion of powers compared to the current Income Tax Act of 1961, which primarily focuses on physical assets and manually recorded financial data. Legal and Privacy Concerns The new Bill has raised concerns among legal experts and privacy advocates.
Critics argue that the broad definition of "virtual digital space" could lead to arbitrary scrutiny without adequate judicial oversight or procedural safeguards. This could potentially infringe upon fundamental privacy rights upheld by the Supreme Court. Additionally, experts warn that these powers may extend to company data where taxpayers are employed or were previously employed.
Finance Minister Nirmala Sitharaman defended the bill in Parliament, stating that tax authorities already use personal information from apps such as WhatsApp and Google Maps for investigations. She emphasized that formalising access to digital records is necessary to combat tax evasion effectively..
