The Income Tax Department will reportedly have the legal right to investigate your social media profiles, emails, bank accounts, online investments and trading accounts. If tax authorities suspect that you have evaded taxes or have any undeclared assets, cash, gold, jewellery, or other valuables, they can investigate your accounts, according to an ET report.
This new provision will come into effect under the proposed Income Tax Bill and will make the process of tax investigations in line with the digital age, the report said, adding that the purpose of this change is to prevent financial fraud, undeclared assets and tax evasion.
When can tax officials access your digital information?
Under Section 132 of the existing Income Tax Act, 1961, tax officials can conduct searches and seizures if they have credible information that a person is concealing his income, assets or financial records with the intent to evade taxes.
Until now, they had the power to break open doors, safes or lockers to investigate if they suspected that undeclared assets or financial records were hidden there, the report said. But from April 1, 2026, this right will also be extended to the digital world. Now officials will also have the right to access computer systems and online accounts if they suspect that information related to tax evasion is being hidden there, it added.
Also read: Income Tax cracking down on individuals with low fund withdrawals, suspicious spending patterns: Report
What does this mean for you?
If tax officials suspect that you have not disclosed full information about your income or assets, they can investigate your emails, bank accounts, trading platforms and social media activities, the ET report said.
As financial transactions are becoming digital, the investigation process of tax officials is also becoming modern. This new law shows that digital forensics will now play an important role in tax investigations. However, it will be interesting to see if this change will be effective in curbing tax evasion or will it raise privacy concerns.
For now, the best way is to file your tax returns correctly and disclose your income and investments. If you have significant investments or assets, it would be wise to consult a tax expert to avoid any hassles in the future.
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