To issue manual for new Income Tax Bill's digital searches, seizures, says CBDT Chief

Indian Express

23-07-2025

Even as Parliament's Select Committee on the new Income Tax Bill retained the digital search and seizure provisions without any significant changes in its report this week, the Income Tax Department is in the process of defining tighter procedures to protect the privacy of the taxpayer after concerns were raised by digital rights activists. In an interview with The Indian Express, Central Board of Direct Taxes (CBDT) Chairman Ravi Agrawal said the Tax Department is going to issue a manual that will outline the procedure for the analysis of digital evidence.
'From a regulatory point of view, statutory permissions are there which mandate the Tax Department to actually not part with the data in an unauthorised manner. It's a legal obligation…we have come out with the search and seizure manual. We are also coming up with the digital manual for analysis of digital evidence. There also we would be actually taking care of it. So, we will address it,' he said.
Stating that it is a 'genuine concern' of the taxpayers, Agrawal said there is a mechanism wherein such information would be scrutinised in a sanitised environment by authorised people only. 'We are in the process of defining procedures wherein these things could be made more tight to take care of a taxpayer. It is a genuine concern of the taxpayer,' he said.
The tax authorities, however, may face an issue during investigations as digital records would also include personal communications. For this, Agrawal said it would be the responsibility of the Tax Department to analyse just the relevant data and redact the rest.
'How do you investigate? There's a mobile, there is a personal chat also here, there's a financial transaction also. So, say, it's WhatsApp, it's both (personal and financial). You got to maintain the evidentiary value of this mobile also. It cannot be that at that point in time, you say I'll take this but I'll not take the other part. There would be continuity. So, therefore, to maintain the evidentiary value, you have got to capture the data in toto. But then once you have captured the data, it's the responsibility of the Tax Department to ensure that whatever investigation is done, only the relevant data is actually analysed, and the other data is redacted,' he said.
Apart from the key concern of an infringement upon the right to privacy, stakeholders, in their suggestions to the Select Committee on the new Income Tax Bill, had flagged the need to define clear guidelines for the use of personal data obtained during searches; removal of the power to cover any person who is present in the premises of the search operation; and introduction of restrictions for protecting privileged communication such as those between husband and wife, with doctors/ lawyers etc.
The Income Tax Bill, which was tabled in Lok Sabha in February this year, had defined 'virtual digital space' – in the powers to call for information during surveys, searches and seizures – as 'any digital realm that allows users to interact, communicate and perform activities' through computer technology. It had also allowed tax authorities to break open, or 'override' access controls, such as passwords, set up by users for digital communication on social media platforms, email services, and other communication on encrypted platforms such as WhatsApp.
Aanchal Magazine is Senior Assistant Editor with The Indian Express and reports on the macro economy and fiscal policy, with a special focus on economic science, labour trends, taxation and revenue metrics. With over 13 years of newsroom experience, she has also reported in detail on macroeconomic data such as trends and policy actions related to inflation, GDP growth and fiscal arithmetic. Interested in the history of her homeland, Kashmir, she likes to read about its culture and tradition in her spare time, along with trying to map the journeys of displacement from there.
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