In the 2025 Union budget, finance minister Nirmala Sitharaman introduced a new Income Tax Bill, a revamp of the old one – Income-tax Act, 1961.
Although Sitharaman assured that the new Bill will “simplify” things for taxpayers, experts point out things will get complicated and intrusive from here on.
Sitharaman, while presenting the 2025 Union budget in the Lok Sabha had stated, “The revised Income Tax Bill is expected to be clear, concise, consistent and supplemented with illustrative examples to aid understanding and interpretation by various stakeholders, which will also eliminate obsolete and redundant provisions, according to industry experts.”
She added that the ongoing review of the Income-tax Act, 1961, will modernise and simplify India’s tax system in line with broader economic goals.
However, the revised version of the Income Tax Bill conceals potential risks. Ready to be implemented from April 2026, tax officers will get full access to a taxpayer’s digital records. The clause was not in the Income-tax Act, 1961, where although tax officers are permitted to authorise laptops, hard drives, and emails, they were restricted to pry digital assets.
As per clause 247 of the new Income Tax Bill, designated income tax officers in India will now have the right to access your emails, social media, bank details, and investment accounts, in certain cases, starting April 1, 2026, if they suspect tax evasion or undisclosed assets on which tax is not paid.
It also states that if the taxpayer refuses authorisation to their digital records, tax officers can bypass passwords, override security settings, and unlock files.
This clause of the new Income Tax Bill is dangerous as it is a clear violation of privacy and harassment.
According to Vishwas Panjiar, a partner at Nangia Andersen LLP, he warned that the new Income Tax Bill will infringe personal data.
“This represents a notable departure from the present Income-tax Act, 1961, which did not explicitly cover such digital domains. Without clear safeguards, these extensive powers could lead to taxpayer harassment or unnecessary scrutiny of personal data,” Panjiar was quoted by Reuters.
