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The Central Board of Direct Taxes (CBDT) Chairman, Ravi Agrawal, has clarified the department's stance on investigating taxpayers' digital devices like laptops and emails. He stated that while the department can seize the entire content of a digital device during search and seizure operations, only relevant financial data will be analysed for tax investigation purposes. Personal chats and irrelevant information will be redacted to protect taxpayer privacy.

These powers are part of the new proposed Income Tax Bill, 2025, which aims to replace the Income-Tax Act, 1961, and simplify tax laws. While concerns about privacy have been raised, Agrawal emphasized that these provisions are not for general surveillance and are strictly applicable only during search and survey operations when taxpayers are non-cooperative or refuse to share information.The department is in the process of creating a digital manual to outline procedures for analysing digital evidence, ensuring that only authorized officers access necessary data in a sanitized environment.

The CBDT Chairman also highlighted the department's increased use of data analytics and artificial intelligence (AI) to crack down on tax evasion, particularly concerning online transactions, social media sales, and virtual digital assets. He noted that digitization has significantly expanded the taxpayer base and improved the efficiency of tax administration.The new law aims to make compliance easier for taxpayers, with simplified language and formats for tax returns.

 


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