Mumbai, February 14: India's new Income Tax Bill 2025, introduced by Finance Minister Nirmala Sitharaman, proposes substantial changes to the country's tax laws, including sweeping powers for authorities to access taxpayers' emails, trading, and social media accounts during searches. This new bill aims to simplify the six-decade-old legislation.

The new Income Tax Bill 2025 grants tax authorities the power to access a taxpayer's email servers, online investment accounts, trading and bank accounts, social media accounts, and digital application servers during searches. Previously, tax authorities demanded access to laptops, hard disks, and emails, but the law did not explicitly mention digital records. Finance Minister Nirmala Sitharaman Cites Development Projects Undertaken by Modi-Govt to Trash TMC’s Claims of Centre Ignoring West Bengal.

Definition of Virtual Digital Space:

The bill introduces the concept of "virtual digital space," defined as platforms allowing user interaction via computers. This includes email servers, banking and trading accounts, social media, cloud servers, and other digital realms. During searches, taxpayers must provide access to their electronic records and virtual digital space. If declined, authorities can override the systems.

Search and Seizure Provisions:

The new bill retains search and seizure provisions but mandates greater cooperation from taxpayers. Tax officials can enter any business or charitable institution and demand access to sensitive materials or systems from proprietors, trustees, employees, or any present person. Authorities can override access codes to any computer system or virtual digital space if access codes are unavailable. New Income Tax Bill 2025: Finance Minister Nirmala Sitharaman To Introduce New Income Tax Bill Today.

Technical Assistance Requirement:

Individuals present during inspections must provide technical assistance, including sharing access codes to grant access to digital records, books of accounts, and computer systems.

Structural Changes:

The terms “assessment year" and “previous year" are replaced with "tax year," aligning timelines and tax calculations directly with the financial year in which income is earned and taxed.

These changes mark a significant shift in India’s tax administration. The bill will first be screened by a select parliamentary committee as the government seeks to balance effective tax investigations with the protection of taxpayer rights.

(The above story first appeared on LatestLY on Feb 14, 2025 12:13 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).