Income Tax Department Gains Legal Power to Access Social Media, Emails, and Bank Accounts from April 1, 2026
The Income Tax Department is set to gain significant legal authority starting April 1, 2026, allowing officials to access social media, bank accounts, online investments, trading accounts, and personal emails if they suspect tax evasion. Additionally, tax officers will have the right to conduct searches and seizures, even making forced entries into premises when necessary under applicable laws.
New Income Tax Bill to Strengthen Investigation Powers
Finance Minister Nirmala Sitharaman has confirmed that the new Income Tax Bill will be taken up for discussion in the upcoming monsoon session of Parliament. The bill, introduced in the Lok Sabha on February 13, aims to replace the existing Income Tax Act of 1961. It introduces significant changes that impact individuals, businesses, and non-profit organizations.
However, Clause 247 of the proposed bill has drawn criticism for granting expanded powers to the Income Tax Department. This clause enhances the authority of tax officials to access and investigate digital records in suspected cases of tax evasion.
Key Provisions Under Clause 247 of the New Income Tax Bill
Under Clause 247, tax authorities will have the power to:
- Enter and search any premises – If officials suspect that unreported income, assets, or financial records are being hidden.
- Access digital records and systems – Including emails, social media accounts, computer systems, and electronic storage devices.
- Break open locks or bypass security codes – To gain access to buildings, safes, lockers, or digital accounts.
- Search individuals on the premises – If they are suspected of concealing financial documents or digital records.
- Seize financial records, assets, and digital evidence – Including online transactions, electronic data, and investment details.
- Issue orders preventing the transfer of assets – To stop the removal or sale of valuables that may be linked to tax evasion.
Definition of Virtual Digital Space Under the New Law
The Income Tax Bill expands the definition of virtual digital space to include:
- Social media accounts
- Email services
- Bank accounts
- Online trading platforms
- Investment portfolios
- Cloud storage and remote servers
How This Affects Taxpayers
With the introduction of these expanded powers, tax authorities can conduct in-depth investigations into an individual’s or business’s financial activities. If discrepancies or unreported income are found, they can take immediate action, including asset seizures and penalties.
This development underscores the need for taxpayers to ensure complete compliance with tax regulations. Maintaining accurate financial records and reporting all sources of income will be crucial to avoiding legal scrutiny.
As the Income Tax Bill progresses through Parliament, further discussions and possible amendments may shape the final implementation. However, the increasing focus on digital financial tracking signals a shift towards stricter tax enforcement in India.
