India's Income Tax Department to Monitor Digital Activities, Including Cryptocurrency Holdings, from April 2026 Under New Bill

India's Income Tax Department will gain the authority to monitor individuals' digital activities, including social media accounts, emails, and online financial transactions, starting from April 1, 2026, as per the Income Tax Bill 2025. This new power aims to enhance the department's ability to detect tax evasion and undisclosed assets, including cryptocurrency holdings.

Under Clause 247 of the bill, tax officers can access digital platforms if they suspect tax evasion. This includes the ability to override passwords and access codes to computer systems and virtual digital spaces where necessary. The move is seen as an effort to modernize tax investigations in line with the increasing digitalization of financial transactions, utilizing digital forensics to trace undisclosed income.

Privacy concerns have been raised by experts who fear that the broad powers granted to tax officials could lead to misuse and potential violations of privacy rights. The bill is currently under review by a select committee, which will engage with stakeholders before finalizing the legislation.

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