New I Tax Bill will Prevent Digital Evasion

Defending inclusion of digital elements in the Income-Tex Bill, 2025, the finance minister said existing provisions under the Income-Tax Act, 1961, primarily referred to physical records only, leaving a gap in addressing digital data.

“A provision to look at the data exists in the current environment, particularly in certain cases of search and seizure, authorised by a competent authority. Now, it has been specifically mentioned in the new Income-Tax Bill because the 1961 Act does not account for digital records,” she said.

The key changes include expanding the definition of undisclosed income to include virtual digital assets, and allowing officers to gain access to virtual digital spaces by overriding any required access codes during search and seizure.

Citing instances where digital evidence had helped unearth tax evasion, she said: “Unaccounted money of 250 crore was detected when encryption was decoded. Evidence from WhatsApp messages revealed crypto transactions worth over 90 crore and a bogus billing syndicate worth 200 crore.”

She also highlighted how Google Map history helped trace locations linked to unaccounted transactions, and Instagram was used to establish ownership of high-value assets.

Sitharaman informed the Lok Sabha the government’s “nudge campaign” encouraging taxpayers to voluntarily disclose foreign assets and income had yielded significant results. Recalling a 2018 announcement by former finance minister Arun Jaitley regarding global information-sharing agreements, Sitharaman said India now received data on foreign accounts held by Indian residents.

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