The Income Tax Bill 2025 may grants IT Department the right to access taxpayer’s digital spaces.
Legal Basis
As per Chapter 14, Section 261(i) of the bill, tax officers can investigate virtual digital spaces during inspections, searches, and surveys.
This includes not just bank accounts, but also Messaging Apps (WhatsApp, Telegram), emails, social media accounts, digital transactions and cloud storage (Google Drive, One Drive).
Who is going to be Affected?
The rule will not apply to everyone, but to select cases involving:
- High-value transactions
- Undisclosed foreign investments or crypto transactions
- Lavish social media lifestyle mismatched with ITR
- Non-filing of tax returns
- Suspicious activities like money laundering or hawala transactions
The law aims to curb tax evasion by tracking undisclosed income, benami transactions, and black money in the digital world.
The department can monitor almost all financial activities in the digital world if deemed necessary.
The tax department’s powers in digital space will be similar to physical search and seizure powers.