With digital data being stored in varieties of devices, the Finance Ministry will be widening the definition of the ‘computer system’ under the new Income Tax Bill 2025 and the Central Board of Direct Taxation (CBDT) will be soon coming out with a detailed Standard Operating Procedure (SOP) for handling digital data, finance minister Nirmala Sitharaman informed Rajya Sabha on Tuesday.
“The definition of a computer system has to be wide enough. Today, the computer systems are of so many different varieties,” added the Finance Minister. She highlighted that the provisions will be made to deal with those tax evaders who don’t let the officials from the Income Tax department access their devices, claiming that the respective device doesn’t come under the definition of ‘computer system’ as stated in the Income Tax Bill 1961.
“They (tax evaders) look at the narrow definition and say you can’t touch my computer, as this is not defined by rule. So we have kept that wider. With fast changing technology most of the data is now stored in sophisticated digital devices. Therefore for access to such data, there has been some rationalization of search provision, “added Sitharaman during her speech at Rajya Sabha.
She cited some instances where the tax evaders refused to give access to the system claiming that the “the password is kept in the country, from where they have come.”
While the Opposition has raised concerns about privacy issues due to the changes to be implemented under the new tax law, the Finance Minister has confirmed that no additional power will be assigned to the income tax officials that could be utilized to breach privacy of the taxpayers. She also assured that for better understanding of the concept of ‘computer system’, “CBDT will bring out detailed SOP for handling digital data.” CBDT will also come out with a SOP as to how to deal with the personal information seized during searches.
The new Income Tax Bill 2025, passed by the Lok Sabha on Monday, aims to streamline the six-decade old Income Tax Law 1961 law by reducing chapters and simplifying the language to ease taxpayer compliance and speed up the tax filing process.
Source from: https://www.newindianexpress.com/business/2025/Aug/12/definition-of-computer-system-to-be-wider-under-i-t-bill-fm
