A major privacy debate has emerged around the new proposed Income Tax Bill, 2025, which allows tax officials to access taxpayers’ digital devices, social media accounts and private emails during search and seizure operations. This new Bill was introduced in the Lok Sabha in February this year, during the Budget session of Parliament. The new proposed Income Tax Bill, 2025, seeks to replace the Income-Tax Act, 1961. The Bill was then referred to the Select Committee of the Lok Sabha, which submitted its detailed report in Parliament on July 21, with several key suggestions.
In the new Income Tax Bill, there is one provision that triggered a major debate among taxpayers in the country. This provision is about allowing tax officials to break into and access taxpayers‘ social media accounts, personal emails, bank details, etc. Surprisingly, the Select Committee has not recommended any changes in the provision.
Amid growing concerns about possible misuse of personal data, CBDT Chairman Ravi Agrawal has clarified that only relevant financial data will be examined, and personal chats will be redacted.
The Income Tax Department is now preparing to take special care of the privacy of the taxpayer during digital searches. In an interview with the Indian Express, the CBDT chairman has said that when the Income Tax Department collects data from a digital device, its entire content is secured as evidence. But during the investigation, only the necessary information will be seen from it.
Only relevant financial data will be analysed out of full content, says CBDT chairman
Agarwal clearly said that, “While the full content of a device (like WhatsApp messages) may be captured to maintain evidentiary integrity, only relevant financial data will be analysed.” That is, even if WhatsApp chats have been backed up from a mobile phone or laptop, only the tax related information will be made a part of the investigation.
He also added that, “Irrelevant personal chats will be redacted during the investigation.” That is, personal chats that are not related to tax will not be included in the report and will be ignored.
Taxpayers’ concerns on privacy justified, says CBDT chief
The CBDT chief admitted that the concerns of taxpayers about privacy are absolutely justified. Therefore, the department is now creating a digital manual, so that there is a fixed process for checking data during search operations. This manual will ensure that only authorized officers can access limited and necessary data.
The purpose of this new initiative is to protect the privacy of taxpayers and strengthen the credibility of the Income Tax Department.
Agarwal said that to maintain balance in the process of investigation, it is important that the department uses only as much data as is necessary.
This step is a relief for those taxpayers who were till now afraid that their personal data could be misused.
