The character of tax enforcement in India has undergone a profound transformation in the past decade. Where once the quintessential search meant officers descending on premises to uncover hidden books of accounts or unaccounted cash, the reality of the modern economy demands something far more sophisticated. In 2025, the Central Board of Direct Taxes (CBDT) updated its Search & Seizure Manual, explicitly recognising that evidence today is predominantly digital in nature and that investigations must therefore be anchored in technology.
This detailed article explores the new-age technologies, tools, and methods highlighted in the manual, with references to the relevant pages, and situates them within the broader policy context.
The manual’s foreword candidly notes that the Department’s existing Digital Evidence Investigation Manual (2014) was outdated. With rapid advancements in cloud storage, encrypted communications, and virtual digital assets (VDAs), earlier guidelines could not keep pace. The new manual explicitly aligns investigative protocols with:
This triad ensures that procedures around seizure, preservation, and admissibility of digital evidence remain lawful and robust (Foreword, p.1).
The shift reflects global enforcement trends. Tax agencies worldwide—from the US IRS Criminal Investigation to HMRC in the UK—are deploying data analytics, AI, and cyber-forensic tools. CBDT’s recognition of the same is both inevitable and commendable.
2.1 NATGRID: Multi-Source Data Fusion
NATGRID (National Intelligence Grid) is at the heart of the Department’s pre-search intelligence arsenal. It consolidates data from banks, airlines, railways, telecom operators, FASTag, immigration authorities, and vehicle registries. For investigators, this means:
Such insights allow officers to build robust pre-search dossiers, narrowing the scope of searches and reducing disruption (Manual, §1.4.1.2.8(a), pp.20–21)
2.2 Corporate Data Management (CDM)
The Corporate Data Management (CDM) system aggregates Ministry of Corporate Affairs (MCA-21) filings into analyzable formats. This enables officers to:
Shell companies have historically been used to layer transactions and launder funds. By harnessing CDM, investigators can pierce these structures swiftly (Manual, §1.4.1.2.8(b), p.20)
2.3 DIP and ASTR: Telecom Intelligence at Scale
The Digital Intelligence Platform (DIP), powered by the Department of Telecommunications, gives investigators access to subscriber details and telecom footprints. The integration of:
enables verification of SIM ownership and detection of fraudulent connections. Further, the Mobile Number Revocation List (MNRL) allows officers to flag numbers that have been deactivated or re-issued, a common tactic to evade detection (Manual, §1.4.1.2.8(c), p.21)
This has direct operational relevance: mapping communication networks between suspected tax evaders and their intermediaries.
2.4 Dark-Web Data Access Tool (DDAT)
Perhaps the most striking inclusion is the Dark-web Data Access Tool (DDAT) developed by C-DAC, Hyderabad. Traditionally beyond the reach of mainstream browsers, the dark web hosts illicit marketplaces, forums, and leaks. The tool permits:
The manual confirms that user credentials have already been issued to Investigation Directorates (Manual, §1.4.1.2.8(d), p.21)
Press reports corroborate this, noting CBDT’s broader push to trace offshore servers, AI-platform data, and dark-web activity.
2.5 Insight and i-Search: Domestic Data Mining
The Insight portal consolidates income-tax returns, Statements of Financial Transactions (SFTs), Annual Information Statements (AIS), and third-party feeds. Its i-Search functionality enables officers to:
Such link analysis is crucial in uncovering hidden relationships before a raid is authorised (Manual, §1.4.1.1.1, pp.13–14).
2.6 FINnet 2.0 and FIU Integration
The Department’s access to FINnet 2.0, the Financial Intelligence Unit’s upgraded reporting platform, further strengthens investigations. Through STRs (Suspicious Transaction Reports) and CTRs (Cash Transaction Reports), investigators receive:
The manual notes that FIU outputs are routed through the Insight portal, and user manuals for FINnet 2.0 have been distributed (Manual, §1.4.1.2.3, p.13).
2.7 Digital Intelligence & Analytics Labs (DIALs)
Given the volume of data seized in modern searches—ranging from hard drives to cloud accounts—CBDT has established Digital Intelligence & Analytics Labs (DIALs). These labs provide:
The manual explicitly records that DIALs are being rolled out across India to supplement the Department’s investigative capacity (Manual, §3.17, p.100). Recent reports highlight operational labs in Hyderabad and Patna, with more planned.
Section 2.21 of the manual introduces guidance for cryptocurrencies and other VDAs. Officers are advised to:
When VDAs are suspected, immediate control-room notification and forensic handling are mandated (Manual, §2.21, pp.59–60).
This section reflects India’s growing concern with crypto-linked tax evasion, aligning with global enforcement trends.
Beyond intelligence platforms, the manual stresses forensic rigour. Officers must:
These steps ensure that digital evidence remains admissible and credible in judicial proceedings (Manual, §3.17, p.100)
The manual underscores the importance of legality and proportionality. Key provisions include:
Chapter 9 specifically requires approvals for sharing intelligence with other law enforcement agencies (Manual, Ch.9, pp.135–139).
The CBDT’s toolkit now rivals that of specialised cyber-crime units. By integrating NATGRID, DIP, DDAT, Insight, and DIALs, the Department can trace even the most sophisticated evasion strategies. Yet, this transformation raises concerns:
Balancing investigative effectiveness with civil liberties will be critical as these systems mature.
Conclusion
The Search & Seizure Manual, 2025 represents a watershed moment in Indian tax enforcement. By embracing technologies such as NATGRID, DIP, DDAT, FINnet 2.0, and DIALs, the Income Tax Department has re-equipped itself for the digital age. At the same time, its emphasis on compliance with the DPDP Act and evidence law shows an awareness of privacy and due process concerns.
Going forward, the challenge lies in judicious application—ensuring that technology empowers enforcement without undermining taxpayer rights or the rule of law. If successfully implemented, CBDT’s digital leap could set a benchmark for investigative agencies across the globe.