In today’s fast-paced life, being online has become a part of many individuals’ daily routine. Be it ordering groceries, shopping for clothes, giving life updates, or paying bills, many people use digital means for different aspects of their life.
The new Income Tax Bill, 2025, also sees the digital space as an important area. Set to replace the Income Tax Act of 1961, the Bill empowers the authorities to gain access by “overriding” the access code of computer systems or ‘virtual digital space’. According to think tank PRS Legislative Research, the new bill defines digital footprint as “an environment, area, or realm that is constructed and experienced through computer technology. It includes email servers, social media accounts, online investment and trading accounts, and websites for storing details of asset ownership.”
A top Income Tax Department official told PTI on March 10 that the Bill would not breach the online privacy of common taxpayers even if their tax returns land into scrutiny. The Bill will come into effect from April 1, 2026, if passed in the Parliament.
As the new Bill proposes scrutiny of all your online transactions by the Income Tax Department, when needed, it could be a good time to look at your digital footprint for better tax planning.
What Is Digital Footprint?
It is basically the sum of all the data you leave while browsing the internet, including the posts you share and the websites you visit. There are two kinds of digital footprints- active and passive.
An active digital footprint means the user has deliberately shared information about themselves. This could mean online posts, agreeing to accept cookies on internet browsers and logging in to a website. A passive footprint means that the user is unaware that information about them is being collected. Social media websites using your likes and comments to target you with special content and advertisements is an example of how a passive digital footprint is used. A review of your digital footprint is necessary as it encompasses all your online financial transactions, apart from social media posts.
Why Should You Track Your Digital Footprint?
Your data can create a positive or negative reputation with potential employers. The data can be exploited by cybercriminals as well.
For maintaining your privacy and security, it is essential to track your digital footprint. Measures include multi-factor authentication, disabling unnecessary cookies, relying on secure websites (those with HTTPS) while sharing data and controlling who can see your posts on social media. Also, it’s extremely important to take precautionary measures while seeking online loans and exploring investment options.
Implementing these tips will keep your devices safer and allow you to minimise the risks of online financial fraud.
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