Section 247 of the Income Tax Bill, 2025 Empowers Tax Officials to Access Emails and Social Media Accounts
- Rajesh Kumar Kar
- Aug 18
- 6 min read
Updated: Aug 19
The income tax authorities have now been vested with the power to examine digital data, such as emails, social media accounts, and online banking platforms of tax assessees, according to the Income Tax Bill, 2025. Even though the government argues that these steps are necessary to combat tax evasion, privacy concerns have sparked debates over individual rights in the Internet age.
Table of Contents
Provisions of the New Income Tax Bill
The revised Income Tax Bill makes the previous law easier for taxpayers to understand by reducing its word count by almost half and combining its 52 chapters into 23 chapters. By eliminating unnecessary clauses, it streamlines compliance and establishes a single "tax year" that is in line with the financial year. Under Section 132 of the Income Tax Act of 1961, the Income Tax Authority previously permitted authorised officers to search and seize an individual's assets and books of accounts if they had reasonable suspicion that the individual in question had any unreported income or documents that could be used to avoid paying taxes. The scope of these powers is significantly altered by Section 247 of the Income Tax Bill, 2025, especially with regard to tax officials' access to electronic media, such as emails, social media, trading, and bank accounts.
Section 247 of the New Income Tax Bill, 2025: Empowering Tax Officials to Access Emails and Social Media Accounts
The bill's clause 247 permits tax authorities to access digital platforms such as social media and emails during searches, bypassing passwords, if people refuse to cooperate. In order to combat tax evasion in the digital age, tax inspectors are given the authority to access virtual digital spaces such as social media, online banking platforms, and emails under Section 247 of the Income Tax Bill, 2025. Since more financial transactions are taking place online, such as cloud storage, cryptocurrencies, and digital banking, this clause makes it possible for authorities to look into and follow undeclared income or concealed assets. Section 247 modernises tax enforcement to encourage responsibility in the age of digital technology, enable compliance, and stay up to date with changing evasion strategies, as digital records are gradually replacing physical ones.
What is Virtual Digital Space?
According to the New Income Tax Bill, a "virtual digital space" is any digital environment where people can interact, communicate, and carry out tasks using computers. It consists of:
Email servers
Social media accounts
Any website with details of the ownership of assets
Online investment account, banking account, trading account, etc.
Digital application platforms
Remote/cloud servers
Any other space of a similar nature
Implementation Date of the Provision under Section 247
After the Income Tax Bill, 2025 is approved by both houses of Parliament and signed into law by the president, its provisions will take effect on April 1, 2026.
Impact on Taxpayers
Tax authorities do not need permission to request access to relevant electronic documents if they suspect that an individual has unreported income or assets. This includes anything from business papers to data on personal computers. According to this clause, individuals or businesses must provide technological assistance, such as access codes and other resources, so that tax authorities can review digital records.
Benefits of Unrestricted Access
The advantages of unfettered access to virtual digital space are as follows:
Improved tax evasion detection
Greater transparency
Avoiding tax fraud
Quicker and more effective investigations
Prevention of financial crimes online
Conclusion
Although streamlining India's tax regulations is a positive step in lowering litigation and enhancing compliance, allowing unfettered access to private internet platforms presents significant privacy issues. The protection of citizens' fundamental rights and efficient enforcement must be balanced by the legislative branch. Such an arbitrary and ambiguous clause carries the potential of becoming a tool for arbitrary scrutiny rather than a systematic approach to tax enforcement in the absence of court involvement or other procedural safeguards. The new Income Tax Bill's lack of clear procedural safeguards might lead to unrestricted data gathering and phishing expeditions against professionals, businesses, and individuals.
Frequently Asked Questions
Q1. What is Section 247 of the New Income Tax Bill 2025?
In order to prevent tax evasion in the digital age, Section 247 of the Income Tax Bill, 2025, gives tax inspectors access to virtual digital places. It poses privacy concerns even as it seeks to increase detection, openness, and investigation efficiency.
Q2. Can income tax authorities read WhatsApp messages?
If tax authorities suspect someone of hiding taxable income or cryptocurrency holdings, they can examine encrypted conversations, cloud storage, and digital asset exchanges under the new framework of the Finance Bill 2025.
Q3. Can tax officers access personal emails, social media and bank accounts of assessees without a notice?
If income tax agents suspect tax evasion or unreported money, they may search personal emails, social media accounts, and bank accounts without prior notice under the Income Tax Bill, 2025.
Q4. When can income tax officials access my digital accounts?
Section 247 of the Income Tax Bill, 2025, permits income tax authorities to access your digital accounts in the following situations:
Suspicions of tax evasion or unreported income
Noncompliance with a summons or notice
Inquiries into assets that have not been reported
Q5. How is Section 247 different from Section 132?
Similar search and seizure powers are granted by Section 132 of the Income Tax Act of 1961, although there are no special provisions for electronic media. The 1961 Act, which reflected the state of technology at the time, mostly concentrates on tangible goods and records. In accordance with modern financial practices, Clause 247 of the 2025 Bill clearly includes digital documents, modernising these authorities.
Q6. Can tax officers legally access personal emails under Section 247? Yes, if there is reason to believe the email account may contain financial or tax-related communications. This is especially relevant for digital entrepreneurs and influencers not reporting income properly in their ITRs.
Q7. What triggers scrutiny under Section 247?
Indicators like unreported income, high-value transactions, or mismatch in declared vs. observed digital earnings can trigger digital access scrutiny under this section.
Q8. Will PAN-Aadhaar linking be used to match email/social data?
Yes. Data collected via PAN-linked accounts can be algorithmically matched with digital behavior like ad earnings, free gifts, or endorsements spotted on social platforms.
Q9. How can Section 247 impact freelancers or influencers?
Those receiving digital payments (e.g., via PayPal, Razorpay, or international platforms) must disclose such income. Non-disclosure could be caught via email analysis or sponsored content patterns.
Q10. Is email access automatic or via warrant?
Access is granted only through authorization and in cases where there’s “reason to believe” under Section 132 or 133A. This is not arbitrary surveillance.
Q11. Can WhatsApp and DM screenshots be used as evidence?
Yes, under Section 247, such communications can be treated as digital proof of barter transactions or paid collaborations if not disclosed in ITR.
Q12. How can I protect myself from misuse of this law?
Ensure all sources of income (freebies, gifts, ad revenue) are declared under proper heads in ITR — especially under “Income from Other Sources” or “Business Income.”
Q13. How does this affect startups or digital product sellers?
Startup founders often use personal email IDs for transactions. If these are used for payment receipts or contract negotiations, they can be scrutinized.
Q14. Can cryptocurrency communication also be tracked?
Yes, if crypto trades or wallet details are found in emails and not declared in Schedule VDA of ITR, the department can initiate proceedings.
Q15. What’s the penalty for hiding digital income detected via email/social media?
Penalties under Sections 270A and 271AAC may apply — including 50% to 200% of tax evaded. Prosecution may follow if deliberate concealment is proven.
Q16. Can brands gifting products be questioned under this section?
Yes, gifting high-value items (like phones, travel, etc.) without TDS deduction or invoice records can be flagged if evidence is found digitally.
Q17. Can archived social posts be used against you?
Yes. Even deleted posts or stories that have been archived or screen-recorded can serve as evidence in case of undeclared promotional activity.
Q18. Does Section 247 override privacy laws?
Not directly — but it works within the framework of investigative provisions, prioritizing tax transparency over individual digital privacy in specific cases.
Q19. Will tax officers use AI to flag suspicious digital activity?
Yes. The department is reportedly using AI models to track inconsistencies between lifestyle, social posts, and declared income.
Q20. Do I need to mention social media earnings in ITR-4 or ITR-3?
Yes. If you’re a professional or business earning through social platforms, ITR-3 (business/profession) is often the correct form to declare such income.
Q21. What is the controversy regarding the constitutional validity of Section 247
The ambiguous "virtual digital space" allows monitoring of a person's private and financial online activities without any restrictions. This leads to worries about possible arbitrary inspection and state overreach. Since the clause does not impose any reasonable grounds and is understood as being used as a rule rather than an exception, such a search and seizure calls into question the constitutionality of the provision. The purpose of the search and seizure must be clearly stated, and there must be reasonable and probable grounds for the search and seizure before private property and an individual's personal data can be accessed.
