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The bill, which was introduced in the Lok Sabha on Thursday, included a new terminology “Virtual Digital Space” in the section related to the searches of search and seizure.
New Income Tax Bill.
Finance Minister Nirmala Sitarman has introduced the much awaited new income tax bill in Parliament. The bill, a simplified version of the Income Tax Act of 1961, introduces several major changes, which includes a provision to override the tax authorities to the computer system and access code of virtual digital space, including online trading and investment accounts Simultaneous cloud servers are included. According to the news agency, in cases of discovery and seizure PTI,
The Bill, which was introduced in the Lok Sabha on Thursday, included a new terminology “Virtual Digital Space” in the clause related to searches and seizure cases.
According to the bill, virtual digital space covers any digital field that allows users to interact, communicate and perform activities using computer systems, computer networks, communication devices, and email server, social, social Media accounts, online investment account, trading account, banking account, etc. Any website used for details of ownership of any property; Distance server or cloud server; And digital application platform.
Search and seizure provision
One of the major criticisms of the Current Income Tax Act is the comprehensive powers given to tax authorities, allowing them to enter the premises, operate discoveries and seize assets without providing clear justification. While the new Income Tax Bill maintains search and seizure provisions, it makes more cooperation from the evaluator.
According to the new bill, tax authorities can enter any business or charitable institute and demand that the proprietors, trustees, employees, or even exist in “any other person” present at that time. Livamint Citing reports Print,
The Income Tax Bill, 2025 also includes provisions stating that the tax officer can get access to any said computer system, or virtual digital space by overrising the access code, where the access code is not available “.
Technical assistance should be one
The current Income Tax Act allows officers to inspect the account books, verify cash and stock and take any relevant information for tax action. However, the new bill goes one step ahead of the obvious needs of the individuals present in the inspected premises to provide technical assistance. This includes digital records, providing access to digital records, accounts books and even computer systems by sharing “access code”.
An important structural change in the new bill is the replacement of the terms of “evaluation year” and “last year” with the new defined “tax year”. Which income is earned and tax is levied.
These changes mark a change in India’s tax administration, which aim for greater transparency, while also raise concerns over confidentiality and compliance burden for taxpayers.
