Dangers of the new income tax bill: The government is keeping an eye on your every digital activity

#News India Bureau March 9.2025

The new Income Tax Bill proposes to give income tax officials the power to access social media and other digital accounts. This includes online investment, trading and banking accounts, as well as investigation of email servers. In this new Income Tax Bill, “virtual digital space” has been defined under the power of income tax officials to seek information during survey, search and seizure. That is, to understand in simple words, understand that whatever payment you make or receive online, the government will have full right to investigate it. Your every digital activity will be under the eyes of the government. Even your confidential emails will no longer be confidential.

What is Virtual Digital Space

In this bill, virtual digital space has been defined as “any digital area that allows you to interact, communicate and perform activities through computer technology”. Your online privacy will have no meaning. You can protect your email with as many passwords as you want. The government will have the right to read/check/view it.

According to sources, Section 247 of the Income Tax Bill has now been clarified in the proposed bill. Similar powers for search and seizure already exist under Section 132 of the current Income Tax Act, 1961, under which officers can inspect and seize ledgers and other documents in the form of electronic records. But the new bill specifically refers to virtual digital space.

Existing powers under section 132: As per section 132 of the Income Tax Act, income tax officers can enter and search any building, place, vessel, vehicle or aircraft where they suspect that ledger accounts, other documents, money, gold, jewellery or other valuables are kept for tax evasion. Officers have the power to open doors, locks, safes and other storages and seize suspicious ledger accounts, documents, money, gold, jewellery or other valuables.

Changes in the new bill
The new bill, introduced in the Lok Sabha last month, explicitly includes “virtual digital space” in the scope of search and seizure. It is an attempt to define ledgers and other valuables in physical or electronic form. Under this, tax officials can override the access code of a computer system or virtual digital space. Even if it is not available. The bill states, “The officer may, during the search or seizure, question any person who is in possession, control or access to the computer system, ledger, other documents or property, or who is present in or on the premises being searched.”

Sources said that under Section 132 of the current Income Tax Act, tax officials have been seizing electronic devices such as desktops, hard disks. Similarly, they will also collect evidence of communication platforms such as emails, WhatsApp, Telegram. A source said, “Such evidence will not only be useful to prove tax evasion in the court, but will also help in counting the tax evaded money.”

Provision of Section 132(1)(iib)

Section 132(1)(iib) through the Finance Act, 2002 mandates that a person in possession or control of ledger books or other documents held in the form of electronic records must provide access to such documents to the authorized officer. This includes providing necessary credentials and seizure of such documents. Section 132 gives powers to designated tax officers to conduct search and seizure operations based on information of tax evasion.

Congress also explained

A video of Congress spokesperson Supriya Shrinate is going viral on social media. In which she has explained about the proposed Income Tax Bill. You can listen and watch it here.

Congress Seva Dal chief Lalji Desai has also tried to explain it in Hindi. Watch his video as well-

What the government says
The Income Tax Bill, 2025, introduced in the Lok Sabha last month, is claimed to intend to simplify India’s six-decade-old direct tax structure. It is an attempt to streamline provisions, remove obsolete references and create a clear and simple legal framework. The proposed bill will be reviewed by a select committee of Parliament. After being passed by Parliament, this new law will probably come into effect from April 1, 2026.