New Delhi: The proposed Income Tax Bill 2025, could grant tax officials expanded powers to access digital records, including social media and email servers, as part of tax investigations. The bill aims to strengthen oversight on undisclosed income sources linked to online financial activities, raising concerns over privacy and regulatory reach.
Expanded Powers for Digital Audits
A key provision in the bill introduces the term “virtual digital space” under Section 247, allowing tax officers to override access codes for digital platforms when necessary. This means authorities could scrutinize financial transactions on social media, trading platforms, and email communications to track undeclared income.
Officials may use these powers to investigate:
- Online trading, cryptocurrency transactions, and e-commerce earnings that are not reported.
- Lavish spending patterns visible on social media that do not align with declared income.
- Potential offshore investments or financial links uncovered through digital communication.
By auditing these records, tax authorities aim to close the gap between declared and actual income.
Privacy Concerns and Regulatory Debate
While the government justifies these provisions as necessary for financial transparency, critics warn of potential misuse and excessive surveillance. Access to private digital data could raise ethical and legal concerns, making it essential to balance tax enforcement with individual privacy rights.
Shifting Tax Scrutiny in the Digital Age
If passed, the Income-Tax Bill, 2025, would mark a significant change in tax audits, integrating technology-driven financial tracking into tax investigations. The move highlights the government’s increasing focus on digital financial transparency but also underscores the challenge of regulating personal data access in a rapidly evolving digital economy.