Starting April 1, 2026, the Income Tax Department will have the legal authority to access individuals’ social media accounts, emails, bank and trading accounts, and other digital spaces if they suspect tax evasion or undisclosed income. This provision is part of the Income Tax Bill 2025, which significantly expands the government’s ability to search for unreported income in virtual and digital environments.
According to the Income Tax Bill 2025, “virtual digital space” refers to any computer-based environment that is not part of the physical world. It includes any digital realm where users can interact, communicate, or store and exchange information using computer systems, networks, and the internet.
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The bill specifically lists the following as part of virtual digital space:
Tax officials can access nearly any online account, storage system, or communication platform if they suspect tax evasion.
Under the existing Income Tax Act (Section 132), tax officials already have the power to search and seize assets if they suspect undeclared income. If keys are unavailable, they can also break open locks on doors, lockers, or boxes if they have reasons to believe that undisclosed assets or financial records are hidden inside.
The new Income Tax Bill 2025 extends these powers to virtual and digital spaces, enabling officers to override access codes and enter:
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Clause 247 of the Income Tax Bill 2025 states that authorized officers can gain access to undisclosed financial documents or assets stored in digital spaces by overriding any access codes if they are unavailable.
The bill defines the following officials as authorized officers:
Legal experts and data privacy advocates have raised serious concerns about the bill’s broad definition of “virtual digital space” and its potential for misuse.
The introduction of Clause 247 raises serious concerns about privacy rights and the potential for misuse of power.
The broad scope of this bill could be challenged under Article 21 of the Constitution of India, which guarantees the fundamental right to life and personal liberty, including the right to privacy. While the law intends to catch tax evaders, critics argue that without proper safeguards, this provision could lead to:
Comprehensive Guide of Law and Procedure for Filing of Income Tax Appeals, Click Here
Legal experts and civil rights advocates are calling for judicial oversight and the requirement of a court order before tax officials gain access to personal digital data. The government has yet to clarify whether additional checks and balances will be introduced to prevent abuse of these expanded powers.
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Former Infosys CFO Mohandas Pai criticized the move to grant tax officials access to individuals’ social media accounts and emails, calling it an “assault on people’s rights.” Tagging Prime Minister Narendra Modi in his post on X (formerly Twitter), Pai urged the government to implement safeguards against misuse and require a court order before allowing such access.
Sasti Somia Sahu, Expert Counsel on Data Protection and AI at ANB Legal, highlights that expanding tax search powers to digital spaces could violate privacy rights if not bound by due process. She also raises concerns about using social media data, which may have no direct connection to financial transactions or tax assessments.
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According to S.R. Patnayak, Partner & Head of Taxation at Cyril Amarchand Mangaldas, the bill’s broad scope means tax officials could access company data where a taxpayer is or was employed. The ability to override access codes to email servers, bank accounts, and cloud storage could lead to corporate privacy breaches.
Sasti Somia Sahu, Expert Counsel on Data Protection and AI at ANB Legal highlights that expanding tax search powers to digital spaces could violate privacy rights if not bound by due process. She also raises concerns about using social media data, which may have no direct connection to financial transactions or tax assessments.
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