New Income Tax 2025 gives access of Emails and Social Media accounts to Income Tax Officer

Current tax laws in India allow officers to request access to laptops, hard drives, and emails. However, due to the lack of explicit mention of digital records, these requests are often contested legally. A proposed new bill aims to clarify this, explicitly granting tax authorities the power to demand access to digital assets. If a taxpayer refuses, officers will be authorized to bypass security measures like passwords and file encryption.Thus new Income Tax 2025 gives access of Emails and Social Media accounts to Income Tax Officer.

Furthermore, clause 247 of the new bill, effective April 1, 2026, will empower designated income tax officers to access emails, social media, bank details, and investment accounts in cases of suspected tax evasion or undisclosed assets.

What Can be done by Income Tax Officer under Search and Seizure

Income Tax Officer may be authorised t0––
(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;

(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.

What if data is collected during the Search and Seizure

That’s a broad definition of “computer system”! It essentially covers any device or system that can create, process, store, or exchange information. Here are some practical examples of what could fall under this definition:

Devices:

• Personal computers: Desktops, laptops, tablets, smartphones.
• Storage devices: Hard drives (internal and external), USB drives, SSDs, memory cards, CDs, DVDs.
• Communication devices: Modems, routers, smartphones.
• Peripherals: Printers, scanners, cameras.
• Wearable tech: Smartwatches, fitness trackers that store data.

Systems & Networks:

• Home networks: Your Wi-Fi network connecting your devices.
• Corporate networks: Company intranets and servers.
• Cloud services: Google Drive, Dropbox, iCloud, AWS.
• Databases: Customer relationship management (CRM) systems, online banking systems.
• Virtual machines: Software that emulates a computer system.

Specific Examples:

• Emails and social media accounts: Gmail, Outlook, Facebook, Twitter, Instagram.
• Online banking and investment platforms: Access to transaction history, account details, investment portfolios.
• E-commerce platforms: Amazon, Flipkart order history and account information.
• Cloud storage: Files stored on Google Drive, Dropbox, iCloud.
• Cryptocurrency wallets: Software or hardware storing digital currencies.

Essentially, if it stores or processes digital data, it likely falls under this definition.

This broad definition gives tax authorities wide-ranging powers to access information in cases of suspected tax evasion. It highlights the increasing importance of digital data in tax investigations.

This definition of “virtual digital space” casts a wide net, encompassing essentially any online platform or service where users interact and data is stored. Here are some practical examples:

Communication & Social:

• Email: Gmail, Yahoo Mail, Outlook.com, work email accounts.
• Social Media: Facebook, Twitter, Instagram, LinkedIn, TikTok, Snapchat.
• Messaging Apps: WhatsApp, Telegram, Signal, Messenger.
• Online Forums and Communities: Reddit, Discord, online gaming platforms.

Finance & Commerce:

• Online Banking: Account access, transaction history, loan applications.
• Investment Platforms: Zerodha, Groww, Upstox – trading history, portfolio details.
• E-commerce: Amazon, Flipkart, Myntra – purchase history, saved payment details.
• Payment Gateways: Paytm, Google Pay, PhonePe – transaction records.
• Cryptocurrency Exchanges: WazirX, CoinDCX – trading activity, wallet addresses.

Data Storage & Productivity:

• Cloud Storage: Google Drive, Dropbox, iCloud, OneDrive.
• Project Management Tools: Asana, Trello, Notion.
• Online document editors: Google Docs, Microsoft Office Online.

Other Examples:

• Virtual Worlds: Second Life, Decentraland.
• Online Gaming Platforms: Steam, Epic Games Store, Playstation Network.
• Dating Apps: Tinder, Bumble, Hinge.
• Learning Management Systems: Coursera, Udemy.

Implications:

This broad definition means that tax authorities could potentially access a vast amount of personal and financial data stored in these virtual spaces. It raises concerns about privacy and the potential for overreach, especially given the power to bypass security measures.

It’s important to note that access to this data would likely be subject to legal safeguards and require justification, such as suspicion of tax evasion. However, the broad scope of this definition underscores the increasing importance of digital data in tax investigations and the need for clear guidelines to protect individual privacy.

section 247 of the Income Tax Bill 2025 empowers an “authorized officer” during a search and seizure to:

• Examine on Oath: Question any person found at the searched location, or anyone with control or access to digital or physical records.
• Admissible Evidence: Use any statements made during this examination as evidence in future tax-related legal proceedings.
• Broad Scope: Expand the questioning beyond just the immediate items found during the search to encompass any relevant matter related to a tax investigation.

Practical Example:

Scenario:

The Income Tax Department receives intelligence that Mr. Raj, a software developer, is running an undeclared side business involving cryptocurrency trading and is hiding substantial earnings. They obtain a search warrant under Clause 247 of the new Income Tax Bill 2025.

Search and Seizure:

• Tax officials conduct a search of Mr. Raj’s residence. They find his personal laptop, a separate encrypted hard drive, and a ledger containing hand-written notes about cryptocurrency transactions.
• During the search, Mr. Raj’s brother, Mr. Vikram, who is visiting, is present.
• The authorized officer, under the power granted by the clause, decides to examine both Mr. Raj and Mr. Vikram under oath.

Examination:

• Mr. Raj:
  • The officer questions Mr. Raj about the contents of the ledger, the encrypted hard drive, and his cryptocurrency trading activities.
  • The officer also asks about any other sources of income, including overseas accounts or investments, even if they aren’t directly related to the items found during the search.
  • Mr. Raj is asked about the access codes to the encrypted hard drive, and is examined about his knowledge of the operation of crypto currency wallets.
• Mr. Vikram:
  • Even though Mr. Vikram is not the primary target, he is questioned because he is present at the premises.
  • The officer asks if he has any knowledge of Mr. Raj’s financial activities, if he has ever assisted Mr. Raj with any financial transactions, or if he has any information about any hidden assets.
  • The officer also asks if he has any knowledge of the access codes to any of the computer systems found in the premises.

Evidence:

• Any statements made by Mr. Raj and Mr. Vikram during these examinations, even if they contradict each other, can be used as evidence against Mr. Raj in any subsequent tax evasion proceedings.
• If during the questioning, Mr. vikram admits to helping Mr. Raj transfer money to an off shore account, that statement can be used as evidence.
• If Mr. Raj admits to owning crypto currency wallets, and then denies ownership in court, the statement made during the search can be used to contradict his court testimony.

Key Implications:

• This clause significantly increases the potential for gathering incriminating evidence during a search.
• It places a considerable burden on anyone present during a search to be truthful, as their statements can have serious legal consequences.
• It allows for the expansion of an investigation beyond the initial scope of the search.

The proposed expansion of powers for Indian tax authorities to access digital assets has raised concerns among legal expert.  This represents a significant change from the existing Income-tax Act of 1961, which did not explicitly address digital realms. Without robust safeguards, these new powers could be misused, leading to potential mental harassment of taxpayers and unnecessary scrutiny of their personal data.

Essentially, the concern is that granting broad access to digital assets without strong protections could infringe on privacy rights and create opportunities for abuse of power.

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