Income Tax Bill 2025 Raises Privacy Concerns

NEW DELHI: The new Income Tax Bill 2025 in India has raised huge privacy concerns as it will authorize tax officials to enter individuals' private online spaces, such as emails, social media, and cloud storage, in suspected cases of tax evasion. The bill was introduced in Parliament by Union Finance Minister Nirmala Sitharaman on February 13, 2025, and is expected to be implemented in April 2026.

One of the most important provisions of the bill, under Clause 247, allows tax authorities to override access codes and enter online sites if it is suspected that taxpayers are hiding assets or income. This is a tremendous expansion of the current law, which is limited to searching physical premises such as lockers and safes. The suggested bill also brought in the notion of "virtual digital space," which was defined to include all online platforms like email servers, online banking, investment accounts, and cloud storage.

The bill is currently being considered by a Select Committee in Parliament. Legal professionals have raised alarm that although the intention of the government is to stem tax evasion, the lack of proper checks and balances has the potential to result in possible harassment of taxpayers and unnecessary intrusions into personal information. The projection remains a contentious issue as discussions continue, with implications for privacy rights and data protection being a key sticking point among stakeholders.

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