Ramesh Narain Parbat, Member (Legislation), CBDT has clarified that search and seizure actions are very limited in number and are initiated only when we have credible information on tax evasion.
A standard operating procedure for handling digital evidence is expected soon.
The Income Tax Act 2025, which is a major rewrite of the Income Tax Act 1961, has drawn attention for a provision that may allow tax authorities to access taxpayers’ digital data, including social media records, during their search and seizure operations. This law, which recently got approval from President Draupadi Murmu, has now again triggered questions about whether it actually gives officials wider access to tap into your digital records as a power of surveillance.
However, the Central Board of Direct Taxes (CBDT) has now moved to address these concerns. Speaking to media outlets, Ramesh Narain Parbat, Member (Legislation), CBDT, recently stated that the provision is not new, but a clarification of powers that already existed.
“Our search and seizure actions are very limited in number and are initiated only when we have credible information on tax evasion. Increasingly, evidence is stored in the cloud or invested in virtual digital assets. We need access to such data to discover concealed income,” he said.
He also underlined that taxpayer confidentiality remains protected. “This is not about mass surveillance. These powers will only be used in exceptional cases of search, seizure and survey,” he added.
A standard operating procedure for handling digital evidence is expected soon.
Beyond the digital access issue, the government has projected the new Income Tax Act 2025 as a simplification exercise. Archaic legal terms have been removed, and many provisions are now presented in plain, tabular language. The idea, according to Parbat, is that “a common assessee should be able to read and understand the law in his own case.” The expectation is that simpler drafting will reduce disputes and make compliance less cumbersome.
At the same time, the board is also preparing for the Act’s rollout by the end of this financial year. A committee on rules and forms was set up in February of this year, and much of the drafting work has been completed. Thousands of public suggestions have been reviewed, and the Tax Policy and Legislation Division is now examining the draft rules before they are placed before Parliament.
Parbat further noted that supplementary FAQs and guidance notes will also be released to help taxpayers transition smoothly.
The digital infrastructure of the tax department is being upgraded in parallel ahead of the enactment of the new law. “Our systems directorates are working in tandem with the drafting committee so that by February 1, 2026, when the Act takes effect, the entire digital infrastructure is ready,” Parbat said.
As for routine compliance, income tax returns and refunds for the ongoing financial years remain unaffected. The new provisions will apply from the financial year 2026-27, and redesigned return forms under the new law will be introduced from FY28.
The stated goal, he said, is to keep forms and processes simple and easy to navigate, in line with the broader effort to make tax administration more transparent.
