Starting in April 2026, the Income Tax Department can scrutinise your social media profiles, emails, bank accounts, online investments, and trading accounts. Tax authorities are permitted to investigate taxpayers' particular accounts if they suspect tax evasion or undisclosed assets, cash, gold, jewelry, or other valuable possessions.
Lashing out at this proposal, former Infosys CFO Mohandas Pai said allowing income tax officers to view a taxpayer's social media accounts and emails from the coming financial year is a violation of our rights.
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Pai, in a social media post on X, expressed his concerns after reading a news report on this matter and recommended that the government establish safeguards to prevent potential abuse. He further proposed that obtaining a court order should be a prerequisite before implementing such a rule.
"Your email and social media account can be accessed by income tax officers starting next financial year in these cases -This is an assault on our rights! Govt should provide safeguards against misuse, get a court order before this @narendramodi," Pai noted.
It is to be noted that Finance Minister Nirmala Sitharaman recently presented the new Income Tax Bill 2025 in Parliament last month, describing it as a significant reform of the existing tax system that has been in place for over sixty years.
A major point of discussion is a provision that broadens the scope of tax investigations to encompass "virtual digital spaces", a departure from the current regulations in place.
What does Section 247 of Income tax Bill 2025 say
As stated in Section 247 of the latest income tax legislation, authorised income tax authorities will be granted the authority to review your emails, social media activity, bank records, and investment portfolios under specific circumstances beginning April 1, 2026, in cases where tax evasion or undisclosed taxable assets are suspected.
“Break open the lock of any door, box, locker, safe, almirah, or other receptacle for exercising the powers conferred by clause (i), to enter and search any building, place, etc., where the keys thereof or the access to such building, place, etc., is not available, or gain access by overriding the access code to any said computer system, or virtual digital space, where the access code thereof is not available,” the new Income Tax Bill mentions.
In short, the Income Tax officer granted the authority to conduct searches in digital spaces for tax evasion may encounter privacy concerns if not properly regulated. While this measure can aid in uncovering evasion, there is a risk of infringing on individuals' privacy rights.
The Direct tax bill grants tax officers the power to enter business premises and access virtual digital spaces within those premises. The inclusion of virtual digital spaces in the bill is a new addition, as this concept was not previously defined in the existing Income Tax Act.
"According to clause 247 of the Income Tax bill, if an authorised officer has reason to believe that an individual possesses undisclosed income or property that comes under the ambit of I-T Act, they can break open the lock of any door, box, locker, safe, almirah, or other receptacle for exercising the powers conferred by clause (i)... This means that authorised officers w.e.f. 1st April, 2026 can gain access, by overriding the access code, to any computer systems, emails, social media accounts or any virtual digital space, if they suspect you of intentionally evading income tax and where access is not available to them," said Rajarshi Dasgupta, Executive Director-Tax, AQUILAW.
"If there is substantial reason to believe a taxpayer has not disclosed income, officers can seek access. Social media posts showcasing luxury spending (cars, travel, jewelry) without corresponding income declaration may trigger scrutiny. If an individual is linked to a broader tax fraud probe, their digital accounts may be accessed to gather evidence. If someone claims a low income but frequently shares high-value transactions online, it may lead to an inquiry," Alay Razvi, Managing Partner, Accord Juris, told Business Standard.
"According to proposed Section 247 of the Income Tax Bill, 2025, tax authorities can override taxpayer's systems to secure electronically available data where, firstly they have a reason to believe that the taxpayer has evaded taxes or possesses undisclosed income or property and secondly, the taxpayer does not provide access to such electronically available data. Notably, such a search process may be authorised not only for the purposes of Income Tax Bill, 2025 but also for the purposes of Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015," said Kunal Savani, Partner, Cyril Amarchand Mangaldas.