To issue manual for new Income Tax Bill’s digital searches, seizures, says CBDT Chief

By | July 24, 2025
CBDT digital data search under Income Tax Bill manual

The Central Board of Direct Taxes (CBDT) plans to launch a manual to guide digital searches and seizures under the new Income Tax Bill. CBDT Chairman Ravi Agrawal shared this move as part of an effort to balance tax enforcement with privacy protections.

🔍 Why the Manual Matters

People today store key information on phones, laptops, and cloud platforms. With this in mind, the new Income Tax Bill gives tax officials the power to access digital devices during searches.

But this has raised concerns. Without clear rules, digital searches could violate privacy and lead to misuse of personal data. To address this, the CBDT will issue a manual that sets clear boundaries and procedures.

💻 What the Manual Will Cover

According to Agrawal, the new manual will act as an operational guide for handling digital data. Here are the key features:

  • Cloning, not snooping: Officers can clone digital devices during searches. However, they will only access the data later in a controlled environment.
  • Only relevant data reviewed: Investigators will examine only material related to the case. They will skip personal files like private chats, family photos, or legal documents.
  • Secure digital labs: Data analysis will take place in special labs with strict access control.
  • Legal protection for personal info: Communication between spouses or between lawyers and clients will remain private unless it relates directly to tax evasion.

🛑 How the CBDT Plans to Protect Privacy

Agrawal acknowledged that many taxpayers worry about how their digital data is used. He stated clearly that privacy matters and that the department is committed to protecting it.

The CBDT wants to separate data collection from data analysis. This separation helps protect personal content and builds public trust. Only trained officers will access cloned data in secure labs.

📜 New Powers Under the Tax Bill

The proposed Income Tax Bill formally defines terms like “virtual digital space.” It also allows tax officers to unlock encrypted devices or files during approved searches.

Officials argue that these powers are vital in today’s world. Many financial crimes are now hidden behind passwords, encryption, or cloud storage. However, critics want checks and balances to prevent abuse.

This new manual acts as a safeguard. It ensures that tax powers are used fairly and only when needed.

🔧 Technology Will Play a Role

The Income Tax Department is also using artificial intelligence to catch red flags. This includes:

  • Watching for repeated visits to the tax portal
  • Tracking delays in filing returns
  • Spotting sudden changes in income patterns

These tools help the department nudge people toward compliance without direct enforcement. The digital manual will include ways to integrate these tools ethically.

🌐 Aligning with Global Standards

Other countries like the US and UK already have rules for digital searches. Their tax authorities follow procedures to protect private and sensitive information.

The CBDT aims to bring India in line with these global practices. At the same time, it plans to tailor rules for India’s legal and social environment.

✅ Conclusion

The new manual for digital searches marks a shift in how India balances tax enforcement with privacy. By offering clear steps, secure access rules, and privacy safeguards, the CBDT hopes to win the trust of honest taxpayers.

As tax systems go digital, guidelines like this will ensure fair play and responsible governance.