New Delhi: Sources in the Central Board of Direct Taxes (CBDT) have sought to clear the air after some concerns were raised that Income Tax authorities have been given additional powers in the Income Tax Bill 2025 to gain overriding access to the electronic records including email, social media, and virtual digital space.
Sources in the Central Board of Direct Taxes (CBDT) explained that Section 132 of Income Tax Act, 1961 enables authorised officer to require any person who is found in possession of books, accounts, or other documents in the form of electronic record to afford facility to inspect such documents and to seize such document (document includes electronic record as per Section 2(22AA) of Income Tax Act, 1961.).
“Claims that new powers are being introduced are incorrect,” one of the sources said. Similarly, Section 247 of the Income Tax Bill, 2025, prescribes that an authorised officer can gain access by overriding the access code of a computer system or virtual digital space.
“It is only restating of the already existing powers to the authorised officer,” one of the sources explained. It is further emphasized that this power is given to the tax authorities in rare circumstances where a competent authority orders a search and seizure operation and the person concerned is not cooperating with the proceedings.
One of the sources also reiterated that “this is not the standard practice.” It applies only in exceptional circumstances. This was the case under the Income Tax Act of 1961 and remains unchanged in the New Income Tax Bill of 2025. Lok Sabha Speaker Om Birla had constituted a 31-member Select Committee of Lok Sabha MPs to examine the new Income Tax Bill, which aims to simplify tax laws, modernise definitions, and provide more clarity on various tax-related matters.
This new bill, tabled in Lok Sabha by Union Finance Minister Nirmala Sitharaman on February 13, seeks to replace the existing Income Tax Act, 1961 and introduce changes that affect different categories of taxpayers, including individuals, businesses, and non-profit organisations. In the July 2024 Budget, the government had proposed a comprehensive review of the Income-tax Act, 1961. The purpose was to make the Act concise and lucid and reduce disputes and litigation.