India's proposed Income Tax Bill, 2025, seeks to grant tax authorities unprecedented powers to access taxpayers' digital records, including emails, trading accounts, and social media, during searches. The move marks a significant expansion from the current tax law, which does not explicitly cover such digital domains.

Finance Minister Nirmala Sitharaman presented the revamped bill in parliament on Thursday, emphasizing the need to modernize the six-decade-old legislation. The bill will first be reviewed by a parliamentary select committee before further proceedings.

Under the proposed law, taxpayers under investigation would be required to provide access to their "virtual digital space," a newly defined concept encompassing email servers, banking and trading accounts, cloud servers, and social media platforms. Authorities would also have the power to override systems if access is denied.

Legal experts have raised concerns over the lack of safeguards, warning that such extensive powers could lead to taxpayer harassment and potential privacy violations. "A balanced approach is necessary to ensure that legitimate tax investigations do not infringe on digital rights and privacy," said Vishwas Panjiar, a partner at law firm Nangia Andersen LLP.

The Finance Ministry has not yet responded to requests for comment on the matter.