Income Tax Officers to Access Email and Social Media Accounts from Next Financial Year

The Central Board of Direct Taxes (CBDT) has announced amendments to the Income Tax Act, 1961, allowing Income Tax officers to access taxpayers' email and social media accounts in certain cases. This move aims to combat tax evasion and black money, but may raise privacy and data protection concerns. Taxpayers are advised to comply with tax laws and be cautious about online activities. The new rules are expected to come into effect from April 1, 2025.

From April 1, 2026, the income tax department will have the right to breach into and view your social media accounts, personal emails, bank accounts, online investment accounts, trading accounts, and more if the income tax department suspects that you have neglected to pay income tax or if they have any reason to believe that you possess any undeclared income, money, gold, jewelry, or valuable item or property on which you have not paid any relevant income tax under the Income Tax Act, 1961.

Section 132 of the current I-T Act, 1961, provides that the authorised officers can carry out searches and seize property and books of accounts in case they possess information and believe on reasonable grounds that a person possesses any income, property, or documents unaccounted for which they would not willingly reveal to avoid payment of income tax.

One such way they can do so under existing legislation is by prying open the lock of any locker, box, or door in case their keys are not available and if there is reason to believe that any unreported assets, or books of account, are being maintained there. Even this power of break-in, under the new bill on income tax, has also been delegated to your virtual digital space or your computer system.

As per clause 247 of the Income Tax bill, if an authorised officer suspects that a person has undisclosed income or property that is within the purview of I-T Act, they may "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.".