Do Income Tax Officials get Unlimited power to Digital Space using AI? Finance Ministry answers [Read Lok Sabha Document]

With regards to the issue of access to digital space by the income tax officials, the Finance Ministry has clarified in the Lok Sabha that the newly introduced Section 247 of the Income-tax Act, 2025 does not grant unlimited powers to access taxpayers’ digital space using Artificial Intelligence (AI).

The minister answered in response to the parliamentary question asked by three MPs including Giridhari Yadav regarding whether the new Section 247 of income tax act, allows unrestricted digital surveillance by tax authorities.

The new Act contains provisions allowing income tax officials to access digital systems during authorized proceedings, which has led to public confusion and concerns regarding privacy.

In its written reply, the Ministry of State for Finance, Pankaj Chaudhary explained that Section 247 deals with search and seizure powers and is broadly in line with the existing act under Section 132 of the Income-tax Act, 1961.

According to the Ministry, the authority to override access codes and enter computer systems during lawful search proceedings was already available under the old law.

“Even though power to override access code to any computer system was already available under section 132 of the Income-tax Act, 1961, specific enablement has been made for the same in the Act considering the evolution of digital space and rapid advances in technology”, replied the Minister.

The Ministry also stated that there is no reference to Artificial Intelligence anywhere in Section 247 or in related provisions of the new Act. It rejected the suggestion that the law introduces AI-based intrusion or automated digital access powers for tax officers.

“Therefore, the provisions of section 247 of the Act have not assigned any new power to the income-tax authorities” assured the Ministry.

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