Section 247 of the Income-tax Act, 2025 — Search and Seizure (Income-tax Raid Powers)

In plain language

What Section 247 is about

Section 247 of the Income-tax Act, 2025 is the "search and seizure" provision — the legal basis for what people commonly call an income-tax raid. It empowers senior tax authorities to authorise designated officers to enter and search premises, break open locks, inspect records, and seize undisclosed money, jewellery, valuables, books of account, documents and computer systems where there is credible reason to believe income has been hidden from the tax department. It is the direct successor to Section 132 of the Income-tax Act, 1961, carried forward with updated language for the digital age, and takes effect from 1 April 2026.

Who it applies to

• Any person — individual, HUF, firm, LLP or company — suspected of holding undisclosed income or assets.
• Anyone in possession or control of relevant books, documents, computer systems or a "virtual digital space" (email, cloud, online banking, trading or crypto accounts).
• It does not apply to routine filing, regular assessments or ordinary scrutiny — it is triggered only by a formally authorised search or survey action, usually where serious evasion is suspected.

Who can authorise and who can search

• Authorising authority: Principal Chief Commissioner / Chief Commissioner / Principal Director General / Director General (and, in specified cases, Principal Director / Director / Principal Commissioner / Commissioner).
• Authorised officer (the one who actually searches): a Joint Director/Joint Commissioner, Assistant Director/Assistant Commissioner, or Income-tax Officer so authorised.

The "reason to believe" trigger conditions

A search can be authorised where the authority has reason to believe, based on information in its possession, that:

• A person has failed to produce (or would not produce) books of account, documents or information after being served a summons or notice; or
• A person possesses money, bullion, jewellery, valuable articles or assets representing income that has not been, or would not be, disclosed for tax purposes.

Powers of the authorised officer

• Enter and search any building, place, vehicle, vessel or aircraft where such assets or records are suspected.
• Break open locks of doors, boxes, lockers and safes where keys are unavailable, and override access codes/passwords to computer systems and virtual digital space where credentials are not provided.
• Require the person to give reasonable technical assistance, including access codes, to inspect electronic records.
• Seize books of account, documents, computer systems and assets — except stock-in-trade of a business, of which only a note/inventory is made.
• Search individuals present who are suspected of secreting items, and place identification marks and take extracts/copies.
• Provisionally attach property (with prior approval) and refer assets to a Valuation Officer.

Presumptions and safeguards

• Items found in a person's possession are presumed to belong to that person, and the contents, signatures and electronic records are presumed true — the burden shifts to the taxpayer to prove otherwise.
• Where seizure is impractical (bulky goods, running business), the officer may pass a deemed seizure / freeze order instead of physical removal.
• Stock-in-trade cannot be seized — only inventoried.

Key time limits

• Provisional attachment: made within 60 days of the last authorisation being executed, and valid for six months from the end of the month of the order.
• Reference to a Valuation Officer: within 60 days of the last authorisation.
• Freeze/deemed-seizure order: may not exceed 60 days.

How it interacts with other sections

Section 247 works together with the requisition power (assets seized by other agencies), the block/search assessment machinery that assesses income for prior years after a search, penalty provisions for undisclosed income, and the power to call for information and conduct surveys. A search under Section 247 typically leads to a special assessment of the searched person's earlier years.

Practical implications

• Cash, jewellery beyond CBDT-recognised limits, and unexplained assets found in a raid can be seized and taxed heavily, often with penalty.
• Cooperate — refusing passwords or destroying data can lead to override of security, penalty and prosecution.
• The digital reach (email, cloud, crypto, trading apps) is now explicit, but the Government (PIB) has clarified these powers apply only during a sanctioned search/survey, not to everyday taxpayers.

Sources: incometaxindia.gov.in, PIB Fact Check, BusinessToday, Outlook Money, TaxGuru, Taxmann/TaxTMI, EZTax.