The Central Board of Direct Taxes (CBDT) will issue a standard operating procedure (SoP) on search and seizure provisions under the new Income Tax Act, 2025, to guide officials on handling digital records of assessees and ensure consistent application, board member (legislation) Ramesh Narain Parbat told Mint. The new tax law will come into effect in April next year.
The move comes amid concerns from tax professionals over the law’s wording on digital access.
Parbat said tax officials have not been given any new powers; the provisions merely make the existing ones clear and explicitly spelt out.
The department will issue an SOP for handling digital data, the official said, responding to a query on the safeguards that may be needed for officials to access digital data of assessees.
All rights of citizens under the existing law are protected under the new law, as well, Parbat said. The SoP is being issued ensure that assessing officers across the country implement the provisions in a consistent and non-discretionary manner, while tax payers benefit by way of predictability and transparency in administrative procedures.
The existing Income Tax Act of 1961 requires assessees in the possession of books of accounts and certain electronic documents to facilitate officials’ access to them. The new law prescribes that officials can gain access by overriding the access code of a computer system or virtual digital space where the access code is not available.
“These are not additional powers. These powers were already available. They have been spelt out in a clearer, explicit form. That’s all,” Parbat said.
The select committee of parliament had reviewed and approved the modified wordings on search and seizure provisions as it did not entail any change from the current provisions, including those on judicial pronouncements and internal circulars of the tax department, Mint had reported on 22 July, quoting Baijayant Panda, the chairperson of the committee.
Parbat also explained that section 138 of the existing Income Tax Act and the corresponding section 258 in the Income Tax Act of 2025 mandate that information of any assessee cannot be disclosed in any way other than as per the provisions of these sections. These sections deal with the confidentiality of taxpayer information and the circumstances in which the department can share details.
Parbat said a committee set up in February by the board has already examined over 1,000 suggestions regarding redrafting of tax rules as these have to be aligned with the new law. “They have gone through the rules and forms to identify which are the redundant ones and those have been removed. We are aiming that by the end of this year, we will be able to notify all the rules, as well as the forms which will be needed next year,” he said.
The new rules are expected to reflect the precision and clarity in the new law that replaces the existing one that is over six decades old.
He said the new law’s section 536 on repeal and savings will remove all doubts over the transition, the official said. This section explains that actions, liabilities, rights, penalties and proceedings under the old law remain valid.
