From 1st April 2026, Income Tax officials will be able to read your emails and WhatsApp chats? Not really. Know what the new rules say

Social media platforms are abuzz with claims that the Income Tax Department of India will soon be able to snoop on every individual with the help of a new amendment, which users claim grants unprecedented power to tax sleuths to breach privacy and examine emails, chats, and other communications.

The online discussions currently underway claim individual privacy will be compromised and fundamental rights curtailed following the passage of the law, which, they say, accord the government of India unhindered access to emails, messages, instant messaging chats, etc.

However, this is not the first time the internet has been flooded with rumours claiming that the Government of India will gain the power to read citizens’ emails and WhatsApp messages. Such alarmist chatter resurfaces almost every time the Centre considers tightening provisions of the Income Tax Act to curb tax evasion. These claims, framed as concerns over “fundamental rights,” are routinely amplified to mislead the public and exert pressure on the government to preserve the status quo.

Nevertheless, over the past ten years, there has been a significant movement in tax evasion into digital trails, including cloud storage, encrypted phones, email inboxes, trading apps, e-wallets, benami digital identities, and messaging-based dealmaking. Long before cellphones, law enforcement could conduct searches and seizures, but the digital age created a gap. Police could locate a device while conducting a search, but it could still be blocked by passwords, encryption, cloud logins, or remote wipes. 

This provides the policy context for Section 247 of the proposed Income Tax Act, 2025, which is said to be comparable to the traditional search and seizure clause included in Section 132 of the Income Tax Act, 1961.

Why Section 247 of the Income Tax Act, 2025 is needed: Balancing enforcement and privacy

Section 247, the codified search and seizure provision for tax investigations, is introduced by the Income Tax Act, 2025, which takes the place of the previous 1961 Act on April 1, 2026. The clause permits authorised tax officers to carry out search and seizure operations against individuals who are already the subject of formal legal proceedings, such as summonses or notices, and when there is a reasonable suspicion that the individual has hidden assets, income, documents, or pertinent electronic records that are necessary for tax assessment or investigation. Section 247 is a targeted investigation tool that updates current authorities in light of digital economic realities; it is not a warrantless surveillance law.

The law expressly places these powers in the context of ongoing tax proceedings under Section 247. Thus, a random person’s phone, emails, bank accounts, and social media accounts cannot be abruptly searched by an officer. The authority only comes into play when there is a legal summons or notification that calls for the production of books of account or other papers and the taxpayer disregards it, or when there is reliable evidence of income or property concealment that is pertinent to a tax investigation. This is consistent with the fundamental tenet of Indian tax law, which states that enforcement operations must be connected to particular legal procedures (notice or summons). 

The specific inclusion of virtual digital space in Section 247, which relates to online accounts, cloud storage, emails, social media platforms, online banking, investing and trading portals, or any digital environment where financial or communications data may be held, is a significant advancement. Since the majority of financial transactions and important evidence are now stored electronically rather than in physical books of account, this explanation is required. According to the Indian Express, this clear definition acknowledges the importance of digital data as evidence in tax disputes while reiterating and clarifying current powers. 

What critics say and what they miss

Section 247 opponents have expressed worries that, in the absence of sufficient protections, tax authorities may hack into private digital accounts or social media. For instance, some observers have equated the terminology on overriding access codes to warrantless access to private devices or cloud data, interpreting it as a privacy danger. Opponents claim that the clause ‘allows tax authorities to effectively hack into people’s computers, cell phones, and even email or social media accounts if they refuse to provide access,’ according to Medianama. 

However, this argument frequently ignores how similar authorities already exist as well as the contextual restrictions and protections built into the law. No one’s digital accounts can be arbitrarily accessed by the law. Instead, it only permits access as a component of a search and seizure operation that is based on earlier legal actions, such as a summons or notice, and the existence of a reason to suspect that the individual is concealing non-compliance.

For many years, Section 132 of the previous Income Tax Act, 1961, provided a more comprehensive investigative process that included the authority to enter property, seize documents or equipment, and access digital data. Simply put, Section 247 modernises and makes clear how these authorities apply to digital places. 

The concept of procedural rights and limitations that must be upheld during search and seizure is likewise strengthened by the law. In the past, Indian tax law has upheld practices like requesting an authorisation order, providing the taxpayer with an explanation (or documentation of the reasons), creating thorough inventories (panchanama) of confiscated goods, and making sure the taxpayer receives copies of the inventories.

These protections are a part of the regular enforcement framework and are not eliminated by Section 247. Additionally, taxpayers can contest the legality of a search or seizure in court if they feel their rights were violated, and judicial review is still accessible in certain circumstances. 

Section 247’s larger context is the need for contemporary enforcement in a digital economy. Conventional search skills concentrated on actual books of account or records stored in safes or offices. These days, important evidence could be found in bank transaction logs, online investment statements, emails, automatic portfolio records, or even communication channel metadata.

Tax enforcement may be severely hindered if that evidence cannot be properly accessed. Legal assessments have shown that in order to uncover undeclared income in the modern period and ensure effective compliance, search and seizure procedures must be expanded to include digital assets and data. 

A common misconception is that Section 247 permits unrestricted access to all digital personal information. However, as previously stated, this view is inconsistent with the law’s wording and application. Only in the event of a tax proceeding, a summons or notice, and a reasonable suspicion that assets or records pertinent to tax liability are being hidden can access powers become available. Search and seizure powers are not activated by mere suspicion unconnected to a tax procedure. 

Furthermore, the provision must be used in compliance with legal due process, and abuses can be contested in court. This means that tax officers do not have unrestricted authority. According to the Supreme Court of India’s privacy ruling (K.S.Puttaswamy), privacy is a basic right under Article 21, but it can also be reasonably restricted for legitimate governmental reasons as long as certain procedures are followed.

Section 247 requires the legislature to ensure that powers exist to enforce tax compliance in the digital era, but procedural protections and judicial scrutiny ensure that enforcement does not become arbitrary. 

Conclusion

Finally, Section 247 of the Income Tax Act, 2025, is a sensible, updated enforcement mechanism that aligns Indian tax law with modern financial realities. It guarantees that hidden income, whether it is documented in electronic or traditional ledgers, can be looked into by the authorities. The legal structure of authorisation, reasoned belief, and procedural protections that uphold the rights of taxpayers is also retained. It takes a balanced approach, modernising enforcement while integrating due process and accountability in accordance with constitutional standards, rather than compromising privacy.