Interpretation
[Section-261 as per the Income Tax Act, 2025 (this Act) w.e.f. 1st April, 2026.]
For the purposes of this Chapter, the expressions—
- (a) “approving authority” means––
- (i) the Principal Director General or the Director General; or
- (ii) the Principal Chief Commissioner or the Chief Commissioner; or
- (iii) the Principal Director or the Director; or
- (iv) the Principal Commissioner or the Commissioner;
- (b) “asset” includes any money, bullion, jewellery or other valuable article or thing, held in physical or virtual form;
- (c) “authorised officer” means––
- (i) the Joint Director or the Additional Director;
- (ii) the Joint Commissioner or the Additional Commissioner;
- (iii) the Assistant Director or the Deputy Director;
- (iv) the Assistant Commissioner or the Deputy Commissioner; or
- (v) the Income-tax Officer or the Tax Recovery Officer;
- (d) “competent authority” means––
- (i) the Principal Director General or the Director General; or
- (ii) the Principal Chief Commissioner or the Chief Commissioner; o
- (iii) the Principal Director or the Director; or
- (iv) the Principal Commissioner or the Commissioner; or
- (v) the Joint Director or the Additional Director; or
- (vi) the Joint Commissioner or the Additional Commissioner;
- (e) “computer system” means computers, computer systems, computer networks, computer resources, communication devices, digital or electronic data storage devices, used on stand-alone mode or part of a computer system, linked through a network, or utilised through intermediaries for information creation or processing or storage or exchange, and includes the remote server or cloud server or virtual digital space;
- (f) “date on which the last of the authorisations for search was executed” means—
- (i) in the case of search, the date of conclusion of search as recorded in the last panchnama drawn in relation to any person in whose case the warrant of authorisation has been issued; or
- (ii) in the case of requisition under section 248, the date of actual receipt of the books of account or other documents or assets by the requisitioning officer;
- (g) “material seized” means books of account or other documents or digital data storage devices, computer systems, and extracts seized from a person during the course of search under section 247 or requisitioned under section 248, and includes seizure of backup taken from any specialised programs like tally software, excel sheets, word files and all electronic records including data and information in the electronic form containing figures and any other relevant noting, and shall be construed to mean as book of accounts maintained by the said person;
- (h) “proceeding” means any proceeding in respect of any year, whether under the Income-tax Act, 1961or under this Act, which may be pending on the date on which a search under section 247 or requisition under section 248 is authorised or powers under section 253 are exercised, as the case may be, or which may have been completed on or before such date and includes all proceedings under this Act or the Income-tax Act, 1961which may be commenced after such date in respect of any year;
- (i) “virtual digital space” means an environment, area or realm, that is constructed and experienced through computer technology and not the physical, tangible world which encompasses any digital realm that allows users to interact, communicate and perform activities using computer systems, computer networks, computer resources, communication devices, cyberspace, internet, worldwide web and emerging technologies, using data and information in the electronic form for creation or storage or exchange and includes––
- (i) email servers;
- (ii) social media account;
- (iii) online investment account, trading account, banking account, etc.;
- (iv) any website used for storing details of ownership of any asset;
- (v) remote server or cloud servers;
- (vi) digital application platforms; and
- (vii) any other space of similar nature.
FAQs on Section 261 of Income Tax Act 2025
What does the term “approving authority” mean under this section?
It refers to any of the following officers: the Principal Director General or Director General, the Principal Chief Commissioner or Chief Commissioner, the Principal Director or Director, or the Principal Commissioner or Commissioner.
What is included in the definition of “asset”?
An asset includes any money, bullion, jewellery, or other valuable article or thing, held in either physical or virtual form.
Who is considered an “authorised officer”?
An authorised officer includes any of the following: Joint Director or Additional Director, Joint Commissioner or Additional Commissioner, Assistant Director or Deputy Director, Assistant Commissioner or Deputy Commissioner, or Income-tax Officer or Tax Recovery Officer.
What does “competent authority” refer to in this section?
It refers to any of the following officers: Principal Director General or Director General, Principal Chief Commissioner or Chief Commissioner, Principal Director or Director, Principal Commissioner or Commissioner, Joint Director or Additional Director, or Joint Commissioner or Additional Commissioner.
What is meant by “computer system”?
It includes computers, networks, digital or electronic data storage devices, communication devices, and systems used either stand-alone or networked. It also covers remote servers, cloud servers, or virtual digital space used for creating, processing, storing, or exchanging information.
What does “date on which the last of the authorisations for search was executed” mean?
It means either the date of conclusion of search as recorded in the last panchnama in the case of a search under section 247, or the date of actual receipt of books, documents, or assets by the requisitioning officer in the case of requisition under section 248.
What is “material seized”?
It includes books of account, documents, digital storage devices, computer systems, and backups of files seized during a search or requisition. It covers data from programs like Tally, Excel, Word, and all electronic records or notings that constitute books of account.
How is “proceeding” defined in this context?
It refers to any case for any year that was pending or completed on or before the date of a search or requisition, or initiated after such date under this Act or the Income-tax Act, 1961.
What is meant by “virtual digital space”?
It refers to any environment created and experienced through computer technology rather than the physical world. This includes email servers, social media accounts, online investment or banking accounts, websites for asset ownership, remote or cloud servers, digital application platforms, and similar digital spaces.
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