GUWAHATI: The revamped Income Tax Bill, 2025, recently introduced in Parliament by Finance Minister Nirmala Sitharaman, has stirred controversy over a provision that significantly expands the investigative powers of tax authorities. While the government claims the bill aims to simplify tax laws, it also includes a clause allowing officials to access emails, social media accounts, trading platforms, and other digital assets during tax probes.
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A select committee is set to review the bill before it becomes law, but concerns have already emerged over Clause 247, which grants tax officers the power to override security settings, bypass passwords, and unlock digital files if they suspect tax evasion or undisclosed assets. This provision, effective April 1, 2026, explicitly includes “virtual digital spaces”, covering cloud servers, email accounts, and online financial platforms.
Currently, tax officials can demand access to laptops, hard drives, and emails, but since the existing Income Tax Act, 1961, does not explicitly mention digital records, such requests often face legal resistance. The new bill eliminates this ambiguity, making it mandatory for taxpayers to comply.
Legal professionals have voiced concerns over potential privacy violations and misuse of power. Vishwas Panjiar, a partner at Nangia Andersen LLP, highlighted that the bill represents a major shift in tax enforcement, cautioning that without clear safeguards, these provisions could lead to taxpayer harassment. Similarly, Sanjay Sanghvi, a partner at Khaitan & Co, pointed out that while tax officials have previously sought access to digital records, the law never explicitly permitted it—until now.