Section 247: Govt Says No New Digital Surveillance Powers

Since the introduction of Section 247 of the new Income-tax Act, 2025, a widespread debate has been triggered among taxpayers and stakeholders in the industry. Many people had feared that the provision would grant income tax authorities unrestricted access to the personal digital space of individuals, such as emails, social media accounts, and cloud data. However, the government has clarified in Parliament that these concerns are misplaced and misinterpreted. This provision does not introduce any new powers that have not already existed.

This clarification was issued during the Union Budget Session in response to the question that was raised in the Lok Sabha about whether Section 247 actually allows tax officials to access digital spaces using artificial intelligence (AI). Minister of State for Finance Pankaj Chaudhary went on to reject this claim and explained that Section 247 mirrors the earlier Section 132 of the Income Tax Act, 1961, which had dealt with search and seizure powers in times when things went south. According to the government, the new provision simply adapts to modern ways, becoming in sync with the evolution of digital technology.

Section 247 solely focuses on search and seizure operations. It authorises the designated officers, like Income Tax officers, Assistant Directors, and Assistant Commissioners, to conduct searches when they have a reason to believe that the person in question possesses any undisclosed income, assets, or any such relevant documents. More importantly, the scope of these searches now extends to the digital space occupied by these individuals. Officials can examine the electronic files, emails, cloud-storage data and other communications that took place digitally.

The key points emphasised by the government are that these powers are only applicable during any officially sanctioned search and seizure protocols. They do not apply to the routine tax return processes, regular assessments or any standard scrutiny proceedings. This is distinctive and central to the government’s argument that the new provision does invade the taxpayer’s entire digital life.

Another major source of confusion has been the claims implying that the law enables tax officials to use artificial intelligence to monitor and scan people’s personal digital accounts. The government has, however, explicitly denied this. Also stating that there is no mention of artificial intelligence in Section 247 or related provisions.

In conclusion, the government still emphasises that Section 247 is not a new expansion of power but an updated version of the pre-existing protocols. The law will come into force on April 01, 2026, and further clarifications to the rules and updates are expected as implementation nears.