If you evade tax by not giving correct information about your income, properties and other valuables, then the Income Tax Department can search your house to investigate it. This is because the department will get the legal right to do so from April 1, 2026.
The provision to give such rights to the department has been made in the new Income Tax Bill-2025.
The department can also seize property if needed to investigate tax evasion. Section 132 of the current IT Act-1961 gives tax officials the right to conduct searches and seize properties and all types of accounts. However, honest taxpayers will not face any problem in this.
SR Patnaik, tax expert at Cyril Amarchand Mangaldas, says that this search and seizure should be done only as an exception and not as a rule. It is important to respect the privacy of every person in the digital space, so this law should be used only on the basis of solid reasons.
Officials can also break lockers and safes on undisclosed income.
According to Clause-247 of the Income Tax Bill, if a person has any information related to undisclosed income, property or accounts locked in a locker, safe or box and does not have its key, then the Income Tax Department also has the right to break it. They can enter any building and place and conduct a search.
- If the access code of any lock is not available then Income Tax officers can also break it or open it in their own way.
- Income Tax officials can obtain vital information related to tax evasion by raiding your computer system or even virtual space to access such information.
Clarity on virtual digital space is needed in the new bill
Experts say that the expansion of virtual digital space i.e. VDS under the new Income Tax Bill raises significant concerns regarding constitutional validity and enforcement. While the government may justify it as a measure to curb tax evasion and undeclared digital assets, the vague definition of VDS essentially allows monitoring of access to a person’s financial and private digital assets.
- Without safeguards, this new bill creates a conflict between financial scrutiny and individual privacy rights. This could potentially lead to legal challenges and erode trust in India’s digital ecosystem.
These officers will have the right to access the data.
The officers who have been given the right to access your personal data under the new Income Tax Bill include Joint Director or Additional Director, Joint Commissioner or Additional Commissioner, Assistant Director or Deputy Director, Assistant Commissioner or Deputy Commissioner or Income Tax Officer or Tax Recovery Officer.
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