Social Media, Emails Under Scrutiny: New Income Tax Bill To Give Sweeping Powers To Tax Authorities

A provision of the new income tax bill gives sweeping powers to tax authorities, allowing them to access email, social media profiles, and trading accounts, among others during tax investigation. Before the new income tax bill introduced by Finance Minister Nirmala Sitharaman becomes law, a select committee will review it. The key concern before the committee is a clause that expands the area of searches during the tax investigation to ‘virtual digital spaces’.

Currently, tax officers can demand access to laptops, emails, and hard drives. However, such demands from tax authorities often face legal challenges as current tax law doesn’t clearly mention digital records. To make it clear, the new income tax bill hands sweeping powers to tax authorities as officials now can demand digital assets, and if the taxpayer denies, they can bypass passwords, override security settings and unlock files.

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According to clause 247 of the new income tax bill, beginning from 1 April 2026, authorised income tax officers in India will have the power to access your emails, social media, bank details, and investment accounts, in certain cases, if they suspect tax evasion or undisclosed assets on which tax is not paid.

Tax officers will have free access to anything stored in taxpayers’ ‘virtual digital space’. The bill defines ‘virtual digital space’ as a platform allowing users to interact via computers, including cloud servers, email accounts, social media, and trading platforms.

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“This represents a notable departure from the present Income-tax Act, 1961, which did not explicitly cover such digital domains,” Vishwas Panjiar, a partner at Nangia Andersen LLP, told news agency Reuters. “Without clear safeguards, these extensive powers could lead to taxpayer harassment or unnecessary scrutiny of personal data,” Panjiar added.