New Delhi: The income tax department will have the legal right to access your accounts, such as social media, bank accounts, online investment accounts, trading accounts, and personal mail, starting April 1, 2026, if they suspect tax evasion or think the person has unreported income, money, gold, jewelry, or valuable property that has not been taxed.
Finance Minister Nirmala Sitharaman has said that the new Income Tax Bill will be taken up for discussion in the monsoon session of Parliament. The Income Tax 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.
However, Clause 247 of the new Income Tax Bill has raised a few eyebrows, with arguments following that it gives more teeth to the Income Tax Department.
What Does Clause 247 of the new Income Tax Bill Say?
Where the competent authority, in consequence of information in his possession, has reason to believe that— (a) any person to whom a summons under section 246
(1) or a notice under section 268(1),–– (i) was issued to produce, or cause to be produced, any books of account or other documents or any information stored in any electronic media or a computer system, has omitted or failed to produce, or cause to be produced, such books of account or other documents or such information as required by such summons or notice; or
(ii) has been issued or might be issued, will not, or would not, produce or cause to be produced, any books of account or other documents or any information stored in an electronic media or a computer system which will be useful for, or relevant to, any proceedings under this Act; or
(b) any person is in possession of any asset or information in relation to any asset and such asset represents either wholly or partly, income or property which has not been, or would not be, disclosed, for the purposes of this Act, or the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, (herein referred to as the undisclosed income or property in this section),
then the approving authority may authorise any Joint Director or Joint Commissioner or Assistant Director or Assistant Commissioner or Income-tax Officer, or any Joint Director or Joint Commissioner, so authorised, may authorise any Assistant Director or Assistant Commissioner or Income-tax Officer, hereinafter referred to as the authorised officer to––
(i) enter and search any building, place, vessel, vehicle, aircraft where he has reason to suspect that such assets, books of account, other documents, or any information stored in an electronic media or computer systems are kept;
(ii) require any person, who is found to be in possession or control of any books of account or other documents maintained in the form of electronic record [as defined in section 2(1)(ha), (i), (j), (k), (l), (r), and (t) of the Information Technology Act, 2000], on computer systems, any information stored in an electronic media or computer systems, to afford the authorised officer with such reasonable technical and other assistance (including access code, by whatever name called) as may be necessary to enable the authorised officer to inspect any information, electronic records and communication or data contained in or available on such computer systems;
(iii) 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;
(iv) search any person who has got out of, or is about to get into, or is in, the building, place, vessel, vehicle or aircraft, if the authorised officer has reason to suspect that such person has secreted about his person any such books of account, other documents, computer systems or asset;
(v) place marks of identification on any books of account or other documents or make or cause to be made extracts or copies therefrom and also from computer systems;
(vi) make a note or an inventory of any such asset, and stock-in-trade of the business, found as a result of such search; Search and seizure.
(vii) seize any such books of account, other documents, computer systems, or asset (other than stock-in-trade of the business), found as a result of such search;
(viii) serve an order of deemed seizure, on the owner or the person who is in immediate possession or control thereof, of any valuable article or thing, which is not stock-in-trade, not to remove, part with or otherwise deal with it, except with the previous permission of the authorised officer, if it is not possible or practicable to take physical possession or removal to a safe place of such article or thing, due to its volume, weight, or other physical characteristics or it being of a dangerous nature.
According to the Income Tax Bill, what is considered virtual digital space?
The Income Tax Bill defines virtual digital space as encompassing social media, email, bank accounts, trade, investment accounts, and remote servers, says the report.
How can it affect you?
The Income Bill has given officers the powers under search and seizure provisions to access virtual digital space to look for instances of tax evasion online. Tax authorities may look into your emails, bank accounts, trading platforms, and social media activities if they believe you have not fully disclosed your income or assets.