The Ministry of Finance has clarified that Income Tax officials do not have the authority to access personal emails, social media accounts, or bank accounts of all taxpayers. However, a provision in the new Income Tax Bill 2025 permits officials to access a taxpayer’s computer system by overriding access codes in certain search and seizure cases where the individual is not cooperating.
Minister of State for Finance, Pankaj Chaudhary, addressed concerns in Parliament regarding the extent of powers granted under the new tax law. His response came after Rajya Sabha MP Ritabrata Banerjee of the Trinamool Congress raised questions about whether tax officials could gain access to private digital assets.
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The questions raised were:
(a) Will Income Tax officials be allowed access to personal emails, social media, and bank accounts of taxpayers?
(b) If so, what are the details and reasons for such access?
Responding to these queries, Pankaj Chaudhary stated:
“No, Section 132 of the existing Income Tax Act, 1961, allows authorized officers to inspect books of accounts or electronic records maintained under the Information Technology Act, 2000. A similar provision exists in the new Income Tax Bill 2025 under Section 247. However, in cases of search and seizure authorized by the competent authority, where the access code is not available and the assessee is uncooperative, officials may override the access code to gain access to the system.”
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The new Section 247 of the Income Tax Bill 2025 has sparked debate as it provides tax authorities with the power to access a taxpayer’s computer system or virtual digital space suspected of tax evasion. This has raised concerns about privacy and digital security.
As per the Bill’s definition, virtual digital space includes:
- Email servers
- Social media accounts
- Online investment and trading accounts
- Cloud storage servers
- Websites used for storing ownership details of assets
- Digital application platforms
“Virtual digital space is broadly defined, covering a range of digital platforms that taxpayers use for financial transactions and asset storage,” the Bill states.
With the introduction of Section 247, experts warn that while the government aims to curb tax evasion, it must also ensure that taxpayers' digital privacy is protected. The ability to override access codes may be necessary for enforcement, but it should be exercised with strict regulatory oversight to prevent misuse.
The Ministry of Finance has assured that these provisions will only apply in exceptional cases of non-cooperation and after authorization by a competent authority.
