Quick Summary
The Central Board of Direct Taxes (CBDT) has clarified that the provisions of search and seizure under the Income Tax Act have always extended to the digital domain, but the newly enacted Income Tax Act, 2025 has now made these powers explicitly clear. RN Parbat, Member (Legislation), CBDT, in an interview, explained that under the earlierIncome Tax Act, 1961, the definition of "books of account" already covered records maintained in digital form. This allowed tax authorities to examine data st
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FAQ :
The Income Tax Act 2025 explicitly clarifies and strengthens existing powers for digital search and seizure, making them clearer than in the previous Act of 1961.
The primary purpose is to detect undisclosed income and assets, particularly in the context of virtual digital assets and online financial activities.
Yes, the definition of 'books of account' has always included digital records, allowing tax authorities to examine data stored electronically, including on the cloud.
Yes, the power to override passwords has been provided to facilitate the discovery of concealed income.
The new law is scheduled to come into effect from April 1, 2026.
The Income Tax Act, 2025 replaces the over six-decade-old Income Tax Act of 1961.
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