Its Simplified Income Tax Bill 2025 grants the Income Tax Department the legal ability to examine social media accounts, personal emails, bank accounts, online investment accounts, and trading accounts beginning April 1, 2026, prompting worries about digital privacy. The proposed Income Tax Bill, 2025, launched in February, intends to provide tax officials in India more access to taxpayers’ digital platforms – including emails, social media accounts, and online financial accounts – during investigations. This represents a considerable departure from the existing Income-tax Act of 1961, which did not specifically address such digital domains. caknowledgehub.com

According to the new measure, tax officials who suspect tax fraud or concealed assets can seek access to a taxpayer’s computer documents and “virtual digital space.” 

According to an article in the Economic Times, authorized authorities may search and seize assets and accounts under Section 132 of the I-T Act, 1961, if they believe that someone is hiding income, property, or documents to evade paying taxes.

When is it acceptable for tax authorities to search your electronic records?
Under Section 132 of the I-T Act, 1961, authorized authorities may search and take assets and accounts if they believe that someone is concealing income, property, or documents to evade paying taxes.

What does the Income Tax Bill define as virtual digital space?
According to the paper, the Income Tax Bill defines virtual digital space as include email, social media, bank accounts, trade and investment accounts, and distant servers.

On February 13, Finance Minister Nirmala Sitharaman introduced the Simplified Income Tax Bill 2025 in the Lok Sabha, replacing the 64-year-old Income Tax Act. The new Bill spans 2.6 lakh words and consists of 536 sections, with the number of chapters reduced to 23. Under the Bill, a “authorized officer” is an official holding specific designations within the tax and financial regulatory structure, including the Joint Director or Additional Director, Joint Commissioner or Additional Commissioner, Assistant Director or the Deputy Minister Director, Assistant Commissioner or Deputy Commissioner, and Income Tax Officer or Tax Recovery Officer.

Tax officials will have the power to “break open the lock of any door, box, locker, safe, almirah, or other container 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,” according to clause 24/7 of the Bill.

(ii) Similar rules are now in place under Section 132 of the Income Tax Act, 1961, which permits authorities to exercise their authority in situations where the keys are unavailable by breaking the lock of any door, box, locker, safe, almirah, or other container.

(iii) Opponents argue that this is surveillance creep, adding even more layer of control to already exposed digital lives, even though the government defends it as a means to apprehend tax evaders. caknowledgehub.com

The Congress referred to the Bill as “dangerous” and a “direct assault on freedom” in its official X report.