Representative image indicating income tax.
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New Delhi: The Parliament's Select Committee examining the Income Tax Bill, 2025 on Wednesday is learnt to have cleared the proposed legislation without any substantial change, including the contentious provision allowing officers access to communication channels (like WhatsApp) of tax payers facing search or seizure, paving the way for its introduction in the Monsoon Session.
Sources said the Select Committee headed by senior BJP MP Baijayant Panda met here and unanimously adopted the report on the Bill, which was tabled in Lok Sabha on February 13. The panel is expected to table its report on Monday, the first day of the Monsoon Session, and the government is likely to go ahead passing it during the Session that is scheduled to end on August 21.
The government aims to implement the new Income Tax law, which it says would simplify language, eliminate redundancy, and streamline procedures and processes to enhance the taxpayer experience, from April 1, 2026 by replacing the Income Tax Act, 1961. The 1961 Act has been amended 65 times and around 4,000 amendments have been made to its provisions.
While an MP said the panel has made 285 suggestions for consideration of the government, sources said there was no change in the structure and all these changes were technical in nature besides addressing drafting issues. The Ministry is learnt to have accepted almost all suggestions by the panel.
The panel, sources said, retained a provision that allows the Income Tax officers to access any "computer system or virtual digital space" as part of search and seizure proceedings. Concerns were raised about "unfettered access" to the personal data impacting the tax payer's right to privacy besides running the risk of misuse of sensitive and private data.
The Ministry of Finance, sources said, told the panel that the suggestion is not feasible as evidence is found in electronic records like WhatsApp communications and emails and in most cases, the taxpayer does not share the credentials to access it.
It also said various encrypted communication modes are being used by tax payers to communicate and discuss their unaccounted transactions as also account books and other financial records are kept in the digital space. Access to such information is important as without it, fair investigation cannot be carried out, sources quoted the Ministry as saying. The Ministry also argued that no additional power has been given to the tax authorities.