New Delhi, February 19: With the Income-tax Act, 2025 set to come into force from April 1, Section 247 has drawn attention over its scope in digital search and seizure operations. During discussions in the Lok Sabha, several Members of Parliament sought clarity on whether the provision grants tax authorities sweeping access to taxpayers’ digital spaces or enables artificial intelligence based scrutiny.

The Finance Ministry has clarified that Section 247 does not mention AI and does not confer any new or unlimited powers. According to the government, the provision is restricted to authorised search and survey operations and cannot be used for routine scrutiny or general data collection. Income Tax Slabs and Rates: Know New vs Old Regime Ahead of Budget 2026.

The Press Information Bureau further stated that the powers are meant to address serious cases such as tax evasion and undisclosed income. It emphasised that similar search and seizure powers already existed under Section 132 of the Income-tax Act, 1961.

What Section 247 Provides

Section 247(1)(b)(ii) and (iii) refers to “reasonable technical assistance” during authorised search operations and allows officers to override access codes where necessary. The language acknowledges the growing reliance on digital systems for maintaining financial records. Budget 2026 FAQs: From Income Tax Slabs Under New Tax Regime To Transition to ‘Income Tax Act 2025’, All Your Questions Answered Here.

Sandeep Bhalla, Partner at Dhruva Advisors, said a combined reading of these clauses shows legislative recognition of the digital nature of modern record keeping.

He explained that the reference to reasonable technical assistance is facilitative rather than expansive. It allows authorised officers to exercise existing search powers effectively in a technology driven environment. This may include providing passwords, decryption support, access to cloud backups, or assistance in navigating accounting software systems. The power to override access codes acts as a safeguard against non cooperation and prevents statutory proceedings from being obstructed by technological barriers.

Bhalla added that Section 247 does not amount to a substantive enlargement of search authority. Even under Section 132 of the Income-tax Act, 1961, courts upheld seizure and examination of electronic records, including hard disks, servers, and digitally stored accounting data through purposive interpretation.

He noted that while the provision does not explicitly refer to artificial intelligence, its technology neutral wording such as technical assistance and override access code is broad enough to cover contemporary tools, including AI based systems, subject to established legal safeguards.

The Finance Ministry has maintained that Section 247 represents a continuation of the existing search framework in updated statutory language, aimed at aligning tax enforcement with the realities of digital record keeping.

(The above story first appeared on LatestLY on Feb 19, 2026 10:45 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).