The latest draft of the Income Tax Bill, 2025 has sparked concerns over privacy and security as it expands the search and seizure powers granted to tax authorities. Section 247 of the bill allows officials to access electronic devices, social media, and email accounts of suspects.
Under this new provision, tax officials are allowed to break open digital locks and gain access to virtual digital spaces where passwords or access codes are not available. Ajay Kumar, an advocate, says this is merely an extension of the existing powers of tax officials. "They have the right to hack (break open) the computer systems and pull the data out, which is similar to their powers to break locks and enter locked places," he explained.
However, legal experts argue that this provision raises concerns over privacy and data protection. Shruti Narayan, Asia Pacific Policy Counsel at Access Now, a digital rights organisation, stated, "This is an unacceptable provision which could allow the use of privacy-violating data extraction tools to break into locked devices or password-protected accounts without any safeguards, independent oversight, or even a statement of necessity."
The bill also defines "virtual digital space" in a broad manner, covering email servers, social media accounts, online investment and trading accounts, websites used to store asset ownership details, remote or cloud servers, digital application platforms, and similar spaces. Narayan criticized this definition as being too broad, stating that it fails to take into account how overriding access codes will affect the integrity of information on devices or in virtual spaces.
The bill also allows authorities to compel people to grant them access to electronic records. Narayan pointed out that this provision creates wide-ranging privacy risks, particularly given the vast amounts of personal data stored on electronic devices and remote servers. "Given the vast amounts of personal data on electronic devices and remote servers — relating not only to the person who controls the device but also their families and friends, including minors — the lack of adequate safeguards in the Bill creates wide-ranging privacy risks," she said.
Narayan also criticized the bill for prohibiting tax authorities from disclosing the reasons for search and seizure. "It is yet to be seen whether the Digital Personal Data Protection Act — which is not yet in force — will provide any meaningful protection against roving inquiries and invasions of privacy by government agencies," she added.
The new Income Tax Bill, 2025 has raised significant concerns over privacy and data protection. With its broad powers to access electronic devices, social media, and email accounts, the bill poses a significant threat to individual privacy. As lawmakers consider the bill's provisions, it is essential that they take into account the need for safeguards, independent oversight, and transparency to protect citizens' rights.
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