- New Income Tax Bill allows authorities to access digital data in financial investigations.
- WhatsApp and crypto forensics help uncover ₹90 crore in illicit crypto assets.
- Digital tools like Google Maps and Instagram aid in exposing financial crime syndicates.
A new draft Income Tax Bill presented by India’s Finance Minister Nirmala Sitharaman proposes sweeping powers for tax authorities to access citizens’ digital lives—including emails, social media communications, and financial accounts. A stated focus of this expanded reach is tracking cryptocurrency transactions to combat financial misconduct.
New Bill Expands Tax Authority Reach into Digital Space
India’s current 1961 Income Tax Act primarily allows inspection of physical records like ledgers and accounting books. The existing law left ambiguity around accessing digital records such as encrypted messages or online transactions, sometimes creating hurdles in investigations when cooperation was lacking.
The new bill explicitly authorizes the collection of digital evidence, legally empowering investigators to potentially bypass encryption and access online data trails in financial misconduct cases.
Related: Turkey Rolls Out Tougher Crypto Rules to Prevent Money Laundering and Terrorism Financing
Crypto Transactions: A Primary Target for New Surveillance Powers
A key impetus for the bill appears to be tracking cryptocurrency transactions, which authorities often find difficult to monitor due to perceived anonymity features. Minister Sitharaman highlighted past cases where digital forensics allegedly uncovered crypto-related financial activities.
In one instance cited, ₹90 crore (approximately $11 million USD) in crypto assets were reportedly traced, partly by using WhatsApp chats to link individuals to illicit dealings. The draft law aims to formally equip authorities to investigate and prosecute crypto-related financial crimes more effectively, even when facing encryption challenges.
Digital Forensics Tools Expand Investigative Reach
Sitharaman also noted how digital platforms and tools like WhatsApp, Google Maps, and Instagram have previously aided in uncovering broader financial crime networks.
This illustrates the existing digital forensics capabilities the Indian government now seeks to codify legally and direct pointedly towards areas like cryptocurrency transactions and user communications.
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