Overview

• The Select Committee under Baijayant Jay Panda tabled its report on July 21 after 36 sessions and over 100 stakeholder consultations, offering more than 285 recommendations and halving the Income Tax Act’s text to 2.5 lakh words.
• The CBDT is drafting search-and-seizure and digital evidence manuals that include redaction protocols to ensure only relevant personal data is analyzed during investigations.
• The Income Tax Department is deploying AI-driven analytics to track online taxpayer behavior, flag high-value transactions and incorrect deductions, and nudge voluntary compliance.
• Privacy safeguards are under final review to align new digital search powers with Supreme Court privacy rulings and the Digital Personal Data Protection Act, 2023.
• Work is underway to develop rules, forms and procedures ahead of the Income Tax Bill 2025’s slated implementation on April 1, 2026.