Income Tax officials to scan social media for financial discrepancies: New IT rule

The Income Tax Department has new powers. Learn here what powers the new Income Tax Bill brought by the Central Government recently gives to the authorities. 

income tax

The Central Government recently introduced a new Income Tax Bill... Prime Minister Narendra Modi and Union Ministers say that it is intended to simplify tax laws. But a provision in this bill gives the Income Tax Department the power to review taxpayers' personal information, including emails, social media pages, and business accounts, during an income tax investigation. Through this, income tax officials get full authority to view the personal information of taxpayers. 

What does Section 247 of the new bill say?

The main concern caused by this rule is about "virtual digital spaces." According to the new bill, IT officials can request access to digital assets. Even if taxpayers refuse permission, officials can log in without passwords. They can bypass user security systems on digital platforms and view their personal information. 

Digital Records:

 Income Tax Department officials are allowed to access laptops, hard drives, and emails. But the current Income Tax Act does not clearly mention digital records. This is causing a setback to the Income Tax Department.

According to Section 247 of the new Income Tax Bill, income tax officials have the power to access individuals' emails, social media, bank details, and investment accounts if there is suspicion of tax evasion or unpaid taxes.

Authority to the Income Tax Department:

IT authorities can break open and open the lock of any door, box, locker, safety deposit box, almirah, or other containers. They can enter and search any unauthorized building. The subsection of the bill states that if a password is not available to access any computer system or virtual digital space, it can be logged in without it.

Simply put, the new rule allows income tax officials to access the taxpayer's "virtual digital space." This includes any platform that communicates via the Internet, such as cloud storage, email, social media, and online trading platforms.

What are experts saying about the new Income Tax Bill?

Experts are issuing warnings about the new rule.  Experts are concerned that Income Tax Department officials may misuse the new powers without proper safeguards, which could lead to a breach of privacy.

Sanjay Sanghvi of Khaitan & Co. said, "Income tax officials used to ask to access digital devices in the past. But the law did not explicitly allow it. The new bill has provided a legal solution for it."