Outlook Business Desk
The Central Board of Direct Taxes (CBDT) will soon issue a Standard Operating Procedure (SOP) under the Income Tax Act, 2025, and effective from April 2026, to define uniform norms for handling digital records during searches and seizures during enforcement actions, Ramesh Narain Parbat, Member (Legislation), CBDT, told The Indian Express.
According to Parbat, the SOP will lay down clear procedures for accessing digital platforms such as email servers, social media accounts, online banking, trading portals, remote servers and cloud storage, ensuring officials follow structured processes during searches, surveys and seizure operations under the new Income Tax framework.
On privacy concerns, CBDT clarified that there is no expansion of powers. Data access is restricted to provisions defined in the I-T Act. Legal safeguards, under Section 138 of the old Act and Section 258 of the new Act, are expected to ensure taxpayer confidentiality during enforcement action.
Parbat noted that search and seizure proceedings are conducted only in limited numbers each year. The revised framework is designed to balance enforcement with taxpayer privacy, ensuring digital data is handled lawfully and proportionately in India’s changing economic and digital landscape.
For drafting the new rules and forms, Narain Parbat said the principle of simplification is being followed. He explained, “We are trying to draft rules and forms in the same way, following the same principle on which the new Act is based — simplified language, no ambiguity and using common terminology across all the forms.”
According to Parbat, a rules committee was formed in February when the Income Tax Bill was introduced in Parliament. Since then, consultations with trade bodies and professionals have led to thousands of suggestions, with redundant provisions removed to make the draft rules practical, inclusive and simplified.
The CBDT is now reviewing draft rules through its Tax Policy & Legislation division and Systems department. The target is to finalise all forms by the end of this year, with TDS and TCS returns applying immediately, while income tax returns will begin from FY 2026-27.
Parbat also explained the new concept of a tax year in the Income Tax Act, saying, “Tax year will be the year in which we earn the income and in respect of which we will be getting assessed. So only one thing. Of course, the return will be filed in the next year, but it will be in relation to the tax year. Only one terminology would be used, so things will be quite clear.”
Parbat further highlighted that the new Income Tax Act’s simple language makes it easier for ordinary taxpayers to understand. By providing straightforward forms, the Act aims to reduce interpretational issues and support faster, smoother dispute resolution.