If you pay income tax every year, this news is important for you. The Income Tax Department may soon get legal rights to check your social media, email, bank accounts, online investments, and trading accounts.
If officials suspect that you have evaded tax or own undeclared property, cash, gold, jewelry, or other valuables, they can investigate your digital information. This information has been revealed in a report by ET.
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What Will Change Under the New Law?
The proposed Income Tax Bill will introduce this new power for the department. The change is being made to prevent financial fraud, undeclared assets, and tax evasion in the digital era.
Officials have noticed that some people’s spending and bank transactions do not match. While they withdraw very little money from their accounts, their lifestyle and expenses are significantly high.
When Will Digital Information Be Investigated?
Currently, under Section 132 of the Income Tax Act, 1961, officers can investigate if they get strong evidence that someone is hiding wealth, property, or financial records. Earlier, they could only search homes, safes, and lockers.
However, from April 1, 2026, this right will extend to digital data. If officials suspect tax evasion, they will have the authority to access computers and online accounts.
How Will It Affect You?
If income tax officers believe that you have not disclosed your full income or assets, they can now check your email, bank accounts, trading platforms, and even social media activity.
As financial transactions become more digital, tax investigations are also evolving with modern techniques. With the new law, digital forensics will become a key part of tax investigations.
However, it remains to be seen whether this change will effectively stop tax evasion or raise concerns about privacy.
What Should You Do?
The best approach is to file your income tax return correctly and on time. Provide complete details about your income and investments to avoid any future issues.
If you have large assets or investments, consider consulting a tax expert. This will help you stay legally compliant and ensure your financial security.