The Income Tax Department is planning major changes from the new year. From April 1, 2026, income tax officials will have the authority to access email accounts, bank accounts, online trading platforms, social media profiles, and cloud storage of taxpayers when required.
The purpose of this change is to prevent tax evasion and to collect accurate information about a person’s declared income. Let us understand how this new law will impact taxpayers.
Scope of Income Tax Investigations to Expand
Earlier, income tax investigations were mainly limited to physical assets such as lockers, cupboards, documents, and cash. Now, the scope is expanding to include digital assets as well.
Under the new law, income tax officials will be able to examine:
Email inboxes and email accounts
Social media accounts and profiles
Online investments and trading platforms
Digital wallets and cloud storage
This step is aimed at detecting undeclared income and tax evasion, especially income generated through online platforms.
What Changes Are Being Made in the Law?
At present, Section 132 of the Income Tax Act, 1961 allows income tax officials to conduct searches and seizures. This includes seizing cash, jewellery, documents, and other physical assets if a taxpayer is under suspicion.
However, the new Income Tax Bill, 2025 expands these powers. Along with physical assets, officials will now be able to investigate digital assets, such as:
Online banking accounts
Email accounts
Social media profiles
Digital wallets
Online trading and investment platforms
Will Taxpayer Privacy Be Affected?
This does not mean that income tax officials can randomly check the social media or digital accounts of every taxpayer. Just like earlier, searches can only be conducted when there is a valid reason or suspicion.
In the same way that physical raids cannot happen without cause, digital investigations will also require proper justification under the law.
What Is the Government’s Objective?
Today, most financial transactions happen online. Online investments such as foreign trading accounts, cryptocurrencies, digital wallets,
and online businesses are increasing rapidly. Because of this, monitoring digital transactions has become necessary.
The main aim of this new law is to stop tax evasion through online methods. Honest taxpayers who file their returns on time and disclose their full income will not be affected.
To avoid scrutiny:
File your income tax returns on time
Follow income tax rules
Declare complete and accurate income details
Doing so will ensure you stay on the right side of the law.
