Starting April 1, 2026, a major shift in India’s Income Tax Act will give tax authorities the legal right to access and break into your emails, social media accounts, bank accounts, trading platforms, and even online investment profiles. This will occur if authorities suspect you of tax evasion or believe you own undisclosed assets, including money, property, or valuables on which taxes have not been paid.
The current Income Tax Act (1961) under Section 132 already allows authorized officers to conduct searches and seize documents and assets if they suspect a person of hiding income or property to avoid taxes. Officers can even break open doors, lockers, or boxes if keys are unavailable.
The proposed changes, however, extend these powers to digital spaces. According to Clause 247 of the new bill, “authorised officers” can now override access codes and break into your computer systems or virtual digital spaces. This includes emails, social media accounts, online investment accounts, and more if they believe you are hiding undisclosed income.
The bill’s definition of “virtual digital space” is broad. It includes:
Email servers
Social media accounts
Online trading and investment accounts
Bank accounts
Cloud servers and remote storage
Any website or platform storing ownership information
These changes mean tax officers could access your personal and financial data without explicit consent if they suspect tax evasion. While some argue that this will help curb illegal activities, experts warn that it might violate privacy rights.
Legal experts like Sonam Chandwani express concern, saying, “The expansion of Virtual Digital Space in the new Income Tax Bill raises significant concerns regarding constitutional validity, potential state overreach, and practical enforcement.” They emphasize that these provisions could lead to arbitrary data collection without clear safeguards.
Moreover, this could even extend to company data where the taxpayer is employed, raising more concerns over privacy and corporate data protection. As pointed out by experts, such power should only be used in exceptional cases with proper judicial oversight and clear procedures.
This move has sparked debates over the balance between tax enforcement and individual privacy rights, with the potential for significant legal challenges ahead.
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