Finance Minister Nirmala Sitharaman has been discussing India’s economic reforms and future roadmap with Lok Sabha parliamentarians in New Delhi. This week, she defended a provision in the Income Tax Bill, 2025, that grants tax authorities access to WhatsApp messages and emails to track tax evaders and financial criminals. She cited a recent case where decrypting WhatsApp messages led to the seizure of over Rs. 90 crore in crypto assets from a syndicate.
Sitharaman warned that encrypted communication channels are being misused for financial crimes like money laundering and tax evasion. Speaking in Parliament, she noted that while individuals and businesses may maintain clean manual ledgers, they still exploit digital platforms to commit financial offenses.
Backing the controversial provision in the new Income Tax Bill, she said, “The 1961 Income Tax Act mentions physical books of account, ledgers, and manual records but does not address digital records. This creates contention, as individuals may question why their digital records are required despite showing physical ledgers. The new bill aims to address this gap.”
The FM revealed that Rs. 250 crore in unaccounted funds was uncovered through the scanning of encrypted messages and mobile phones.
She added that “WhatsApp communications revealing syndicates involved in bogus bills worth Rs. 200 crores, and instances where capital gains on land sales were manipulated using false documents, reducing Rs. 150 crores to Rs. 2 crores. Professional groups on WhatsApp have also been implicated. Google Maps history has been used to locate hideouts containing cash and unaccounted transactions, while Instagram accounts helped establish ownership of expensive vehicles linked to benami properties.”
So far, Google and Instagram have not commented on the development.
Sitharaman did not specify the timeline for tracing, identifying, and seizing these funds. Her address also lacked details on the confiscated crypto assets. It remains unclear whether WhatsApp’s encryption was directly bypassed or if chats were accessed from seized devices during investigations.
WhatsApp’s Stance on Breaking Encryption
WhatsApp, owned by Meta, has maintained that its end-to-end encryption keeps messages between its users completely private.
“End-to-end encryption keeps your personal messages and calls between you and the person you’re communicating with. No one outside of the chat, not even WhatsApp, can read, listen to, or share them. This is because with end-to-end encryption, your messages are secured with a lock, and only the recipient and you have the special key needed to unlock and read them,” claims the messaging app that has an estimated global userbase of around three billion.
WhatsApp has yet to respond to Sitharaman’s claims, and Gadgets 360 is awaiting its statement on the matter. The platform has also not commented on India’s new Income Tax Bill, 2025, which grants tax authorities access to private communications.
The US-based messaging app has long been at odds with the Indian government over encryption policies. In 2021, it challenged a MeitY guideline requiring social media platforms to identify the first originator of messages, as mandated by the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021.
In April last year, WhatsApp told the Delhi High Court that if forced to break its encryption in India, it would consider exit the market.
This is a developing story and more details will be added.
