• Source:JND
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Starting on April 1, 2026, the Income Tax Department has proposed new legislation enabling it to go far beyond physical searches and gain extensive new powers under the law. For the very first time, income tax inspectors will be able to access electronically — Email accounts, social media pages, and online investment accounts— if there is a reasonable belief that a person is trying to hide income or assets. This is a very important change in policy designed to improve tax collection, but it has also renewed widespread controversies and issues regarding cyber privacy and information privacy.

What the New Income Tax Bill Proposes

According to The Economic Times, this bill permits tax collectors in person and in digital spaces to cross-check if a taxpayer has underreported income or undisclosed assets.

Key highlights:

The expansion focuses on concealed income or underreported assets, which include money, gold, jewellery, real estate, or lucrative properties.

Upon valid suspicion, authorities can now investigate social media and emails.

The change aims to enforce compliance with taxation, combating illicit wealth, and black money schemes.

“If they believe you’re hiding income or assets to avoid taxes.”

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Current Powers Under the Income Tax Act, 1961
Tax officers currently, under Section 132 of the Income Tax Act, 1961, have the power to:

  • Search and seize documents or assets physically.
  • Unlock and open any door, box, locker or safe if there is suspicion that it has been locked and the key is not available.

These powers have traditionally applied to physical premises and tangible possessions.

Expanded Powers Under Clause 247 of the New Bill

Broadening the bounds of enforcement is what Clause 247 of the new bill seeks to do. Introduced under the new bill, this clause includes:

“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.”

This means that authorised officers can:

  • Override passwords to gain access to computers or mobile devices.
  • Break into digital accounts or systems, such as online wallets or investment portals.
  • Access virtual digital spaces where keys or passwords are unavailable.

Implications: Tax Enforcement vs. Digital Privacy

The new legislation is expected to:

  • Strengthen efforts to trace unreported wealth and black money.
  • Make it harder for individuals to hide digital assets or income streams.

However, privacy advocates have raised red flags, citing concerns over:

  • Potential misuse of access to personal data.
  • Invasion of privacy without adequate judicial oversight.

The a need for stricter data protection frameworks.

Final Thoughts

The new legislation invariably has an effect on the ability of tax authorities to track income and assets in the increasingly digitised world. Although there is an effort to limit tax evasion and increase compliance, the new measures might be infringing on personal privacy. As April 1, 2026, comes closer, it is important for people and organisations to be conscious of their online activities and operate within the confines of the law.