THE INCOME TAX ACT, 2025, hastily slammed through both houses of Parliament in August without any parliamentary debate or discussion, contains an outrageous and repressive provision that grants sweeping powers to the Assessing Officer to invade a taxpayer’s digital informational privacy.
While the power to conduct search and seizure is not new - being delineated earlier in Section 132 of the Income Tax Act, 1961 (‘1961 Act’) — one would have expected that the exercise of revisiting a sixty-year-old statute would have been used as an opportunity to align the power with the Supreme Court’s jurisprudence on privacy in the digital age. Instead, the new law doubles down on authoritarian practices, rendering the law even more draconian.
Section 247 empowers the tax authority to enter and search any place where “electronic media” or a “computer system” is suspected to contain relevant information. Section 261(e) defines the term “computer system” expansively to include “virtual digital space,” thus covering personal and professional communication platforms, social media accounts, cloud storage, and other online repositories. In effect, the law extends traditional physical search powers into the digital sphere, radically enlarging the scope of state intrusion into the informational domains of individuals. It is an expansion that raises serious constitutional concerns.
