New Income Tax Bill 2025: Authorities Given Digital Access Powers During Search Operations
Thank you for reading this post, don't forget to subscribe!The Indian government has passed a new Income Tax Bill that significantly revises Section 132 of the Income Tax Act, 1961. This amendment grants tax authorities explicit powers to access digital records during sanctioned search and seizure operations, addressing the challenges of tax evasion in the digital age.
Key Changes and Scope
The updated law equips the Income Tax Department with the necessary tools to track concealed assets in the digital economy. During a search, officials can now access a broad range of electronic data, including:
- Emails
- Cloud storage
- Social media accounts
- Digital wallets
- Cryptocurrency holdings
This power can only be exercised in specific circumstances:
- During a sanctioned search and seizure operation.
- When a taxpayer refuses to provide access credentials or cooperate with investigators.
The previous law lacked explicit provisions for accessing these digital platforms, which allowed certain taxpayers to exploit this loophole for tax evasion. The new framework allows investigators to bypass security features like passwords and encryption if cooperation is withheld, modernizing enforcement capabilities to keep pace with the rapid digitization of financial activity.
Government’s Stance and Public Reassurance
Ravi Agarwal, Chairman of the Central Board of Direct Taxes (CBDT), emphasized that these powers are “strictly restricted to search and seizure operations where taxpayers refuse to share information, and is not aimed at snooping on ordinary taxpayers.” This statement aims to address concerns about potential government overreach and protect the privacy of compliant citizens.
Impact and Future Outlook
This legislative shift is part of a broader government strategy to enhance tax compliance and enforcement. The revised Section 132 is expected to close long-standing loopholes, support more effective investigation procedures, and create a more level playing field in the era of digital transactions. The government hopes this enhanced framework will bolster transparency and reinforce public trust in the tax system.
