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Finance Minister Nirmala Sitharaman introduced the bill in Parliament, calling it a modernisation of the six-decade-old tax framework. (Image credit: Sitharaman X handle)

New income tax bill grants officials sweeping powers to access emails, social media, digital assets

| @indiablooms | Mar 05, 2025, at 04:51 pm

New Delhi: The recently proposed Income Tax Bill, 2025, has drawn attention not just for its aim to simplify tax laws but for a provision granting tax authorities extensive investigative powers, media reports said.

Under the new bill, officials would be allowed to access emails, trading accounts, and social media profiles during tax probes, according to an India Today report.

Finance Minister Nirmala Sitharaman introduced the bill in Parliament, calling it a modernisation of the six-decade-old tax framework.

Before becoming law, it will undergo a review by a select committee.

A key concern is a clause that broadens tax searches to include “virtual digital spaces”, the report said.

Currently, tax officials can request access to laptops, hard drives, and emails, but legal challenges often arise since the existing law does not explicitly cover digital records.

The new bill removes any ambiguity, allowing authorities to demand access to digital assets.

If a taxpayer refuses, officials can override security settings and unlock files, the report said.

According to the report, Clause 247 of the bill empowers designated income tax officers to access emails, social media, bank details, and investment accounts from April 1, 2026, if tax evasion or undisclosed assets are suspected. It further states:

“Break open the lock of any door, box, locker, safe, almirah, or other receptacle for exercising the powers conferred by clause (i), to enter and search any building, place, etc., where the keys thereof or the access to such building, place, etc., is not available, or gain access by overriding the access code to any said computer system, or virtual digital space, where the access code thereof is not available.”

In effect, tax officers would have unrestricted access to anything stored in a taxpayer’s “virtual digital space,” which includes cloud servers, email accounts, social media, and trading platforms.

Legal experts have raised concerns.

Vishwas Panjiar, a partner at Nangia Andersen LLP, told India Today about the significant shift from the Income-tax Act, 1961, warning that without strict safeguards, it could lead to harassment and undue scrutiny of personal data.

Sanjay Sanghvi, a partner at Khaitan & Co, noted that while tax authorities have previously demanded access to digital devices, the law never explicitly permitted it, according to the report.

The new bill eliminates any legal uncertainty, making compliance mandatory.

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