Draft Form No. 86 Proposed to Regulate Digital Records and Seized Assets Under New Tax Law

Last updated: 27 February 2026

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Quick Summary

The Income Tax Department has unveiled Draft Form No. 86, a new proposal designed to regulate the requisition of digital records and seized assets under the Income Tax Act, 1961 and the forthcoming Income Tax Act, 2025. This form provides a legal framework for senior tax officials to obtain books of accounts, documents, computer systems, and assets already in the custody of other authorities, particularly when there's a failure to produce them voluntarily or when they relate to undisclosed income. The move aims to enhance enforcement, ensure compliance, and modernise tax administration, especially concerning digital information.

The Income Tax Department has introduced Draft Form No. 86, a proposed format for issuing a Warrant of Authorisation under Section 248(1) of the Income tax Act, 1961 and the Income Tax Act, 2025.

The draft form outlines the legal framework and procedural authority for requisitioning books of accounts, documents, computer systems, and assets that have been taken into custody by another officer or authority and are considered relevant to income-tax proceedings.

New Tax Law Draft Form 86 for Digital Records and Assets

Key Highlights of Draft Form No. 86

According to the draft document, the warrant may be issued where the approving authority has reason to believe that:

1. A summons or notice was issued under:

Section 131(1) of the Income-tax Act, 1961
Section 142(1) of the Income-tax Act, 1961
Section 246(1) of the Income-tax Act, 2025
Section 268(1) of the Income-tax Act, 2025

and the concerned person has failed to produce the required books of account, documents, or electronic information.

2. Relevant books of accounts, documents, or computer systems useful for income-tax proceedings have been taken into custody by another authority, and there is reason to believe the person concerned would not produce them voluntarily.

3. Assets seized and held in custody represent income or property that has not been, or would not have been, disclosed under the provisions of the Income-tax Act.

Authority Empowered Under the Draft

The draft form authorises senior income-tax officials, including:

Additional Director
Additional Commissioner
Joint Director
Joint Commissioner
Deputy Director
Deputy Commissioner
Assistant Director
Assistant Commissioner
Income-tax Officer

to require the concerned officer or authority to deliver the assets, books, documents, or electronic systems.

The warrant must be issued by an Approving Authority, duly signed and sealed.

Significance of Draft Form No. 86

The introduction of Draft Form No. 86 signals a move toward greater procedural clarity and alignment between the Income-tax Act, 1961 and the proposed Income-tax Act, 2025.

Key implications include:

Strengthening enforcement mechanisms
Providing legal backing for inter-departmental requisition of seized materials
Covering digital and electronic records explicitly
Ensuring compliance in cases of non-cooperation

The draft also reflects the government’s continued emphasis on tightening compliance frameworks while modernising tax administration processes, especially in the context of electronic data and digital financial records.

What Taxpayers and Professionals Should Note

Tax professionals, chartered accountants, and businesses should carefully examine the scope of Section 248(1) under the new Income-tax Act, 2025 framework. The expanded reference to electronic systems and digital information indicates that non-production of digital records may trigger stricter enforcement actions.

Stakeholders are advised to stay updated on further notifications and the finalisation of Form No. 86, as it may have practical implications during assessments, investigations, and proceedings involving undisclosed income or assets.

FAQ :

Draft Form No. 86 is a proposed format by the Income Tax Department for issuing a Warrant of Authorisation to requisition books of accounts, documents, computer systems, and assets relevant to income-tax proceedings.

The warrant may be issued under Section 248(1) of the Income-tax Act, 1961 and the Income Tax Act, 2025, and can be triggered by failures to comply with notices issued under sections like 131(1) or 142(1) of the 1961 Act, or similar provisions in the 2025 Act.

The warrant must be issued by an 'Approving Authority' and can be requested by senior income-tax officials, including Additional Directors, Additional Commissioners, Joint Directors, Joint Commissioners, Deputy Directors, Deputy Commissioners, Assistant Directors, Assistant Commissioners, and Income-tax Officers.

The form allows for the requisition of books of accounts, documents, computer systems (including digital and electronic records), and assets that have been seized and are held in custody by another officer or authority.

It signifies greater procedural clarity, strengthens enforcement mechanisms, provides legal backing for inter-departmental requisition of seized materials, and explicitly covers digital records, reflecting a move towards modernising tax administration and tightening compliance.

Tax professionals and businesses should be aware that the expanded reference to electronic systems means non-production of digital records could lead to stricter enforcement actions. They are advised to stay updated on the finalisation of Form No. 86.

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