Taxpayers covered under Income Tax (IT) surveys will no longer be able to retract statements made to tax officials by claiming they were obtained under pressure, following a new provision introduced under the Income Tax Act, 2025.
Under Section 253 of the new law, statements recorded during surveys will now have to be made on affidavit, a provision that was previously applicable mainly in search and seizure operations.
Tax experts said the change is aimed at strengthening the evidentiary value of statements recorded during surveys and reducing disputes over their admissibility in subsequent proceedings.
The provision will apply not only to regular IT surveys but also to surveys related to Tax Deducted at Source (TDS) compliance and charitable trusts.
Under the earlier Income Tax Act, statements recorded during surveys conducted under Section 133A did not carry the same evidentiary value as those obtained during search operations, and taxpayers could later challenge or withdraw such statements.
With the new law coming into force, statements recorded at the conclusion of a survey will be backed by an affidavit and can be used as evidence in income tax proceedings.
The new legislation also expands the powers of tax authorities during survey operations.
Officials will now be permitted to conduct surveys at locations where books of accounts, records, or financial data are maintained if taxpayers disclose that such information is stored elsewhere.
Authorities will also have the power to inspect and seize relevant data and records found at such locations, including offices of accountants or other authorised representatives handling the taxpayer’s accounts.
Tax experts said the provision is expected to strengthen investigations in cases where records are maintained away from the taxpayer’s primary business premises.
The law, however, continues to restrict survey operations to daytime hours, and surveys cannot be conducted at night.
Experts noted that the new framework would have significant implications in cases involving discrepancies in cash balances, accounting records and tax compliance, as statements made during surveys would now carry greater legal weight.
