A Parliamentary Select Committee tasked with reviewing the Income Tax Bill, 2025 has retained controversial provisions empowering tax authorities to forcibly access social media accounts, emails and other digital platforms during search and seizure operations. Despite stakeholder concerns regarding privacy and potential misuse, the Committee has made no changes to these provisions in its report tabled in the Lok Sabha on July 21, 2025.
The Income Tax Bill, 2025, introduced in February 2025, is intended to simplify and modernize India's tax law by replacing the existing Income Tax Act, 1961. The bill was sent to the Select Committee, chaired by BJP MP Baijayant Panda, for detailed scrutiny and stakeholder consultation.
Tax Officials Can Override Passwords, Access Digital Platforms
Under the new Bill, any person subject to a tax investigation must provide technical assistance, including passwords or access codes, for all digital platforms under their control. These platforms include:
- Emails and social media accounts
- Online trading and investment accounts
- Remote or cloud storage servers
- Digital application platforms
Moreover, the law empowers authorised tax officers to override access controls if the required credentials are not provided voluntarily.
Stakeholders Raise Privacy Concerns
Several stakeholders consulted by the Committee flagged these provisions as intrusive and potentially unconstitutional, suggesting that:
- Access to private accounts should be allowed only if tangible reasons are recorded in writing beforehand.
- Use of such access should be limited strictly to tax-relevant matters.
- Social media and personal emails should be excluded from general search powers under the Act.
Despite these objections, the Committee concluded that the existing provisions are "rational and necessary", citing the growing use of encrypted platforms and online communication by individuals involved in tax evasion.
"Incriminating material is often found in emails, WhatsApp chats and cloud storage. In many cases, taxpayers refuse to share login credentials," the Committee noted. "These amendments are required to ensure effective enforcement and detection of unaccounted income."
Also Read: Lok Sabha Select Committee Submits Key Recommendations on Income Tax Bill, 2025
No Requirement to Record Reasons for Access
On the suggestion that tax officers should record specific reasons before accessing digital accounts, the Committee responded that such a requirement was "not feasible", arguing that the current framework already safeguards taxpayer privacy while preventing abuse of power.
Simplification Achieved, But Controversy Remains
While the Committee hailed the new Bill as a landmark step in tax simplification, critics say the expanded surveillance powers could have serious privacy implications.
According to the report, the Income Tax Bill, 2025 has significantly trimmed the law's complexity:
- Number of words reduced to 2.59 lakh from 5.12 lakh
- Chapters cut from 47 to 23
- Sections reduced from 819 to 536
- More tables (57) and formulae (46) included for clarity
"The new Bill uses simplified language and structure while retaining the core tax principles," the report said.
However, experts warn that despite textual clarity, the retention of expansive powers may lead to legal and ethical debates around digital surveillance and taxpayer rights.
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