Parliamentary panel retains Income Tax Bill provisions permitting tax officers to forcibly entry social media, personal e mail
Table Of Content
The Income Tax Bill 2025 was launched within the Lok Sabha in February 2025. The purpose behind the Bill, as per the federal government, is to simplify and rationalise the present Income Tax Act 1961 and the quite a few amendments which were made to it over the many years because it was launched. It was then despatched to a Select Committee, chaired by Baijayant Panda, for a evaluate.
The authorities on Monday (July 21, 2025) tabled the 4,575 web page report within the Lok Sabha.
The new Bill’s expanded scope of powers given to tax officers throughout search and seizure operations has drawn criticism and requires change, together with from the consultants the Select Committee consulted throughout its evaluate.
Stricter searches
According to the brand new Bill, if an individual is discovered to be in possession or management of any books of account, or different paperwork and knowledge maintained digitally, on laptop methods, or saved electronically, then they need to present the designated revenue tax officer “cheap technical and different help (together with entry code, by no matter identify referred to as) as could also be vital” to allow the officer to examine “any data, digital information and communication or information contained in or accessible on such laptop methods”.
Further, the Bill additionally says that the authorised officer can acquire entry to those digital methods by “overriding the entry code to any stated laptop system, or digital digital house, the place the entry code thereof just isn’t accessible”.
A ‘digital digital house’ contains social media accounts, on-line funding accounts, buying and selling accounts, financial institution accounts, distant server or cloud server, and digital software platforms.
According to the report, the stakeholders the Committee consulted throughout its examination of the Bill raised pink flags concerning these provisions.
Changes “not possible”
The stakeholders urged that the ability to achieve the entry codes of social media accounts be positioned out of the purview of related sections of the brand new Bill. They additionally acknowledged that the Bill ought to clarify that, if entry is gained to non-public e mail addresses and laptop methods, the usage of these accounts “shall be made solely to the extent it’s related for Income-Tax Act and never for any function past the Income-tax Act”.
Others urged that “tangible causes for in search of entry could also be recorded in writing previous to any such exercise being undertaken”.
The Select Committee, nevertheless, has argued that the provisions within the new Bill are vital and due to this fact urged no adjustments to them.
“Various incriminating evidences and materials are discovered/seized from digital information together with WhatsApp communications, emails, and so on,” it stated in its report. “In a lot of the circumstances of search operation the taxpayers don’t share the password/login credential of on-line boards/portals/e-mail accounts, and so on.
“This is as a result of numerous encrypted communication modes are being utilized by tax payers to speak and talk about their unaccounted transactions,” it added. “The modification has been rightly made to rationalise the provisions. Thus, the suggestion just isn’t possible.”
With regard to the stakeholders’ suggestion that tangible causes for offering entry be offered, the Committee stated this was “not possible” because it “seeks to offer safeguard within the statute to stop abuse of energy by Revenue officers in addition to shield the privateness of taxpayers”.
Significant simplification
According to the Committee’s report, the brand new Bill is an enormous step ahead in simplifying India’s revenue tax laws. The new Bill has pared down the variety of phrases within the legislation to 2,59,676 from the 5,12,535 within the Income Tax Act 1961.
The variety of chapters have additionally been diminished to 23 from 47, and the variety of sections have been slashed to 536 from 819. On the opposite hand, to offer larger readability, the brand new Bill has elevated the variety of tables it incorporates to 57 from 18, and the variety of formulae to 46 from 6.
“The language has been simplified making the doc simple to learn and perceive,” the Committee’s report famous. “The drafting fashion of the brand new Bill is simple and clear, making the provisions simpler to know.”
Redundancies and wish for cross-referencing between Sections and Chapters have been eradicated,” it added. “Greater readability has been introduced within the Act with none structural or coverage adjustments and with out disturbing the long-settled taxation rules.”
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