Social Media: There is going to be a big change in the rules related to income tax in India, which can have a direct impact on the digital privacy of common people. From April 1, 2026, the Income Tax Department is going to get the power to not only limit itself to physical assets while investigating tax evasion but can also access the digital activities of citizens. This will be the first time that tax officials will be able to formally conduct investigations in the digital world.
Now not just cash and jewellery, digital world also on radar
Till now, Income Tax officials were allowed to examine material things like house, property, cash, documents and jewelery during raids. This action is taken under Section 132 of the Income Tax Act, 1961. But under the new proposed rules, officials will also get the right to access the so-called virtual digital space.
This digital space will include email accounts, cloud storage, digital wallets, trading and investment platforms, social media profiles and other online accounts. This means that everything from Gmail to social media chats can come under the ambit of tax scrutiny.
Why is the government making such a change?
The government says that today most of the transactions have become online. From banking to investing, trading and even crypto assets, everything is happening on digital platforms. In such a situation, detecting tax evasion only through physical investigation is no longer effective.
According to officials, the entire financial activity of a person is hidden in his digital footprint. Therefore, by getting access to digital data, cases of tax evasion can be detected more accurately.
Will everyone’s data be checked at any time?
The biggest question regarding this change is privacy. However, the government has made it clear that tax officials will not be able to arbitrarily access anyone’s digital data. Just as earlier reason to believe was necessary for raids, the same condition will be applicable for digital accounts also.
This means that unless there is a solid basis against a person for irregularities in income or financial transactions, his email, social media or other digital accounts will not be accessible.
What does this mean for taxpayers?
Tax related transparency is going to increase in the coming time, but at the same time people will have to be more cautious about their digital activities. If your income and transactions are clean and declared correctly then there is no need to panic.
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