With the latest Income Tax Bill 2025, the government has proposed new changes in the Income Tax Act to improve the laws related to tracking digital assets. The changes are proposed because the old Income Tax Act, 1961 did not have enough legal support to properly investigate the digital assets. Finance Minister Nirmala Sitharaman explained during the discussion on the Finance Bill 2025 that the lack of legal support in the old law is the reason why the government is introducing special rules related to the tracking of digital spaces.
As of April 1, 2026 authorised officers will be able to access an individual’s digital spaces under clause 247 of the Income Tax Bill, 2025 provided the officer has reasonable suspicions and information that the individual is hiding some income, property or documents in order to avoid payment of taxes. The authorised authorities will be allowed to access encrypted messages, cloud storage and other digital details if they suspect that someone is hiding taxable income or cryptocurrency holdings.
With the latest Income Tax Bill, 2025 the government supports the searching of digital spaces and online platforms to catch people who try to evade taxes. Finance Minister Nirmala Sitharaman defended the addition of virtual spaces in the search and seizure process for income tax purposes by explaining that similar rules are already in existence under Section 132 of the Income Tax Act, 1961 wherein the authorities are allowed to search the physical assets of the individual who is evading taxes. The Finance Minister pointed out that the current law already covers the search and seizure of physical assets and records but not the search and seizure of digital assets or documents.
Finance Minister Nirmala Sitharaman pointed out that digital forensics plays an important role in uncovering the hidden money. She said that evidence of crypto assets was discovered in WhatsApp messages which helped authorities to uncover ?200 crore in unaccounted funds related to cryptocurrencies and that encrypted messages on mobile phones helped authorities to uncover ?250 crore of unaccounted money. She also mentioned that tools like Google Maps history and Instagram accounts can be useful in finding hidden cash and benami properties.
Can the government read your WhatsApp chats under present tax laws? Here’s what experts say.
Currently, data access is limited to national security situations. There is no strict definition or set of standards for determining which circumstances fall under the purview of national security.
Due to WhatsApp end-to-end encryption, messages are only readable by the users participating in a conversation, neither WhatsApp nor other service providers are able to decrypt them. This safety ensures that no third party, which also includes the service providers like WhatsApp or Telegram can access the messages.
However, experts note that the government presently has the authority to access encrypted messages under certain circumstances, which include situations like legal requests by some authorities, court orders, surveillance and criminal investigations. The Digital Personal Data Protection Act, 2023 (DPDP) along with the Telecom Act, 2023 and the Information Technology Act, 2000 gave power to the government authority to request such data from the service providers.
Section 17 of the DPDP Act, 2023 allows certain situations where the government can access personal data, such as when personal data is necessary for the enforcement of any legal right or claim or by any court or tribunal for the performance of judicial or quasi-judicial functions, criminal investigations, etc. These situations are known as ‘reasonable restrictions’ in the DPDP Act, 2023 Act.
Is Google tracking my location through Maps?
For apps like Google Maps, the government could access location history, search data, and other metadata if there is a valid order by the court with respect to the investigations related to crimes and tracking of black money. Experts point out that law enforcement agencies in India have historically used warrants to request location data during investigations. However, Google is now updating its location history feature, which means your location data will no longer be stored on Google Cloud servers rather, it will be saved on your local device. The users who agree on the storage of location on the device will get more privacy and control. Additionally, this feature will restrict Google's future access to user data in response to location-based queries.
