Quick Summary
The Government has directed tax officials to leverage new provisions under the Companies Act to access data stored on offshore servers and digital platforms. According to internal instructions shared with Income Tax officials on Tuesday, these rules will allow investigators to extract information th
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FAQ :
The manual aims to equip tax officials with updated guidelines to trace and access digital evidence, including data stored on offshore servers and through AI platforms.
Companies must now maintain daily backups of their accounts and related documents on servers located in India and disclose the details of any overseas service provider managing this data.
The manual recognises AI-powered platforms, digital wallets, and cryptocurrencies as potential sources of evidence and provides guidance for tracking digital trails related to them.
Tax officers are advised to preserve offshore data until recovery is possible, potentially using international channels like INTERPOL's G-8 24/7 Network.
Businesses, especially multinationals, need to review their data storage policies, ensure compliance with reporting requirements, and prepare for increased scrutiny of digital evidence.
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