By Ashwani Mishra, Editor-Technology, 63SATS
The Indian government has introduced a provision in the proposed Income Tax Bill 2025, granting tax authorities unprecedented powers to access private digital records, including emails, social media accounts, and cloud storage.
This move, embedded within Section 247 of the bill, aims to enhance tax compliance but has raised serious concerns about digital privacy and governmental overreach.
Breaking Down the Powers Granted
The bill expands the scope of search and seizure operations conducted by tax authorities, granting them the right to:
- Access both physical and digital records, compelling individuals and businesses to provide access to their digital assets.
- Override access codes for computers, cloud servers, and other digital platforms in case access credentials are unavailable.
- Inspect and seize emails, social media accounts, online investment platforms, trading accounts, banking accounts, remote/cloud servers, and other digital spaces.
- Treat all records and communications found in digital spaces as legally valid evidence, presuming them to be authentic and belonging to the person in possession.
These provisions place digital platforms and users under increased scrutiny, aligning virtual digital spaces with traditional physical searches, including breaking into premises, safes, and locked storage units.
Concerns:
The broad language in the bill has sparked concerns among legal experts, privacy advocates, and technology companies:
- Lack of Procedural Safeguards: The bill does not specify the methods tax authorities will use to access digital records, raising fears of potential abuse of power.
- Encryption and Security Risks: Overriding access codes could weaken data security and set a precedent that undermines end-to-end encryption standards.
- Impact on Businesses: Organizations storing customer data in the cloud may find themselves forced to provide access to sensitive user information, potentially breaching global data protection laws.
- Legal Ambiguity: The bill does not define clear limits on what data can be accessed and how it should be handled, leaving room for interpretation and potential misuse.
The government has stated that the provisions are essential to updating tax laws for the digital era.
Currently, the Bill remains a proposal and will undergo further debate before becoming law. If enacted in its present form, India’s tax authorities will begin scrutinizing virtual digital spaces in 2026.
