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Center-Center-DelhiAs Income Tax Act 2025 aims to widen the definition of computer system to ensure better access to digital data for tax evaders, government will follow protocols as per the Digital Data Protection Act, to maintain privacy, confirmed RN Parbat, member (Legislation) of Central Board Direct Taxes (CBDT).
“Select Committee did a detailed discussion on issues around digital data handling and Data Protection Act. We will work in tandem with the Data Protection Act. Even as a part of Standard Operating Procedure (SoP) issued, it will be clarified to the officials on how to handle digital data,” said Parbat.
Finance minister Nirmala Sithraman while presenting the Bill in Rajya Sabha had stated that there would be provisions in this Bill to deal with those tax evaders who don’t let the officials from the Income Tax department access their devices, claiming that the respective device doesn’t come under the definition of ‘computer system’. She also assured that for better understanding of the concept of Computer System, CBDT will bring out detailed SoP for handling digital data.
However, there were concerns about breach of privacy in terms of doing so as a part of seizure and searches. But CBDT assured that the government still has trust in taxpayers and they operate on the fundamentals of ‘trust first’. “We believe in our taxpayers. We hardly scrutinise two lakh returns out of all those filed. Rest is all about trust,” said the CBDT member. Overall, the computational part will be simplified to ensure even laymen can understand that.
It has further been assured by the CBDT that several income tax forms including those for TDS statement, TCS statement, advanced tax transactions will be standardised and smart form will be introduced.
The new Income Tax Bill received the President’s assent and got notified on August 22. The whole agenda of this Bill was to simplify the language of the previous IT Act 1961 and will be effective from April 1, 2026.