Last month, Union Finance Minister Nirmala Sitharaman tabled the Income Tax Bill, 2025 in Parliament. Once passed in Parliament, the Bill will become a law and replace the existing Income Tax Act, 1961.
With this proposed law, which is expected to come into force on April 1, 2026, the government aims to simplify and modernise the tax system. However, some of its provisions have sparked debate. In particular, questions are being raised about the additional powers given to tax officials and their increased access to taxpayers’ digital data.
This expanded enforcement power is outlined in Section 247 of the Income Tax Bill, 2025, which corresponds to the existing Section 132 of the Income Tax Act, 1961, though with expanded coverage.
Expanded powers of search and seizure
Section 247 of the Income Tax Bill, 2025 gives tax officials more powers than ever before, especially in the matter of search and seizure of digital and electronic data. Earlier, the Income Tax Department’s investigation was mainly limited to paper documents and physical premises, but the new law is now taking it to the digital world as well.
Also read: Can tax officials really ask you about daily rations and toiletries? Here’s what experts say
This means that now officials can easily access email servers, social media accounts, online banking, trading and investment accounts, cloud storage, digital wallets and payment applications. Earlier, if any digital data had to be investigated, separate permission had to be taken for it, but now officials have got the power to collect information even by bypassing passwords and access codes.
With this change, surveillance capabilities will increase more than ever. While earlier officials could only search offices, homes, vehicles or a person, now digital platforms can also be monitored.
The new Bill will allow tax officials to directly seize digital records, which will make it easier for them to collect digital evidence related to tax evasion. This may help prevent tax evasion, but it has also raised concerns about privacy and data security of ordinary taxpayers.
Temporary attachment of property: What will change now?
Now tax officials can immediately attach the property during the search itself, and there will be no need to give any separate notice for this as before. This attachment can continue for a maximum of six months,
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