The Income Tax Department will be legally authorised from April 1, 2026, to access social media accounts, personal emails, bank accounts, online investment accounts and trading accounts. Some fishy activities, including tax evasions, undisclosed income, money, gold, jewellery, or property on which an individual has not paid applicable income tax as per the Income Tax Act, 1961, will warrant this scrutiny by the department.
Section 132 of the preexisting I-T Act, 1961, enables authorised officials to search and seize assets and books of accounts if they have reason to suspect that an individual was involved in tax evasion activities.
This legal break-in, now, will not be just limited to physically opening any door or box, if the keys are unavailable. In case of suspicion, the department officials can also break into an individual’s computer system or virtual digital space, under the new Income Tax Bill.
This will let authorised officers break into the suspect’s computer systems, emails, or social media account if the IT department senses that an individual has hidden assets to escape tax. How will it affect a taxpayer?
What is Virtual Digital Space?
As per the Income Tax Bill, the virtual digital space definition is quite wide and its special focus remains on the taxpayer’s social media accounts, bank accounts, trading, investment accounts and emails fall directly under the virtual digital space.
As mentioned in the income tax bill, the digital realm enables individuals to interact and perform activities using computer systems, networks, computer resources, communication devices, cyberspace, the internet, the world wide web and emerging technologies, using data and information in the electronic form for creation, storage or exchange and included:
(i) email servers
(ii) social media account
(iii) online investment account, trading account, banking account, and more
(iv) Website accessed for storing details of ownership of any asset
(v) remote server or cloud servers
(vi) Application
(vii) any other space of similar nature
As per Clause 247, a legal officer can get access to any computer system or virtual digital space even if the access code is unavailable.
List of Authorised Officials As Mentioned in Income Tax Bill
Joint Director or the Additional Director
The Joint Commissioner or the Additional Commissioner
Assistant Director or the Deputy Director
Assistant Commissioner or the Deputy Commissioner
Income-tax Officer or the Tax Recovery Officer
The challenge to the fundamental right to privacy?
Expert raises concerns about the Right to Privacy under Article 21 of the Indian Constitution. While privacy is fundamental, it can have reasonable restrictions in cases of financial fraud, tax evasion, and national security. “The government must ensure these powers are used fairly, without misuse or unnecessary scrutiny,” Arvind Singhatiya, Founder & CEO, LegalKart, told Outlook Money.
An individual can avoid unwanted tax scrutiny, ensuring full compliance with tax laws, by properly disclosing their income and assets.
“They should maintain a clear separation between business and personal finances to avoid confusion or suspicion. Using legitimate tax-saving methods can help optimize tax liability while staying within legal boundaries. Additionally, securing sensitive financial communications through encrypted or safe channels can prevent unauthorised access and protect privacy,” Singhatiya.
What Cautions To Take?
If individuals face unwarranted tax scrutiny or a violation of their privacy without valid cause, they have legal recourse under Article 226 (High Court) or Article 32 (Supreme Court) of the Indian Constitution. “Filing a writ petition can help challenge wrongful actions and seek relief. Ensuring a balance between financial transparency and privacy rights is essential for fair and just enforcement,” added Singhatiya.
Is This Constitutionally Valid?
The Supreme Court (SC) had noted in the case of Justice K.S. Puttaswamy v. Union of India (2017) that the Right to Privacy under Article 21 is inviolable and that any invasion by the State must go through the test of legality, necessity, and proportionality.
“In order to access social media accounts and emails could violate the Information Technology Act, 2000, and its associated rules protecting user data. Unless backed by specific judicial orders or clear statutory mechanisms, this may lead to legal challenges. The government will have to amend the Income Tax Act, 1961, and potentially align it with the Digital Personal Data Protection Act, 2023 (DPDP Act) to ensure that personal data is accessed with transparency and procedural fairness. If not, this could be seen as an arbitrary exercise of power,” Sonam Chandwani, Managing Partner KS Legal & Associates told Outlook Money.
Experts believe that the initiative is a little ambiguous. “Without specific parameters defining when, how, and under what conditions such access will be exercised, individuals may be vulnerable to arbitrary actions,” Dinkar Sharma, Company & Secretary, Jotwani Associates, told Outlook Money.
The proposed measure is a double-edged sword—while it can help curb tax evasion, it must be implemented in a lawful, transparent, and proportionate manner,” as per Sharma.
