The recently introduced Income Tax Bill 2025 has sparked significant controversy due to its provisions granting tax officials access to citizens' digital and financial spaces. Introduced in Parliament by Finance Minister Nirmala Sitharaman on February 13, the bill has been criticised for allowing tax authorities to access emails, social media accounts, bank details, and trading transactions without a warrant or prior notice, solely based on suspicion.
Such powers have raised alarms among opposition parties and civil rights groups, who argue that it paves the way for a surveillance state.
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The Congress party has been vocal in its opposition to the bill, framing it as a tool for the government to intrude into personal lives and stifle dissent. According to Congress social media department head Supriya Shrinate, the bill is a continuation of a trend where governmental powers are used to suppress opposition voices.
The bill introduced in Parliament in February, post the unveiling of the Union Budget 2025, empowers tax officers to enter online platforms for retrieval of information in case there is a suspicion of hidden income or assets.
A specific provision in the bill grants authorities the authority to surpass access codes and gain entry to protected spaces, either physically or digitally, when deemed necessary.
Shrinate said: "Warning: Your email, social media, bank, and trading accounts are under attack. The new income tax law allows tax officials unrestricted access to your emails: read your private conversations; your social media: monitor your posts, messages and interactions; your bank accounts: track every rupee you earn and spend; and your trading accounts: watch your investments and financial moves."
She added: "The new income tax law allows tax officials unrestricted access to your emails: read your private conversations; your social media: monitor your posts, messages and interactions; your bank accounts: track every rupee you earn and spend; and your trading accounts: watch your investments and financial moves... They need NO proof to do so, just suspicion. A government with unchecked power. The Modi government with that has been misusing agencies to silence critics and crush Opposition will now do this: harass and intimidate citizens, settle political scores by targeting opponents, weaponise tax department to destroy reputations and lives. This is nothing but surveillance. Will you just stay silent or look the other way?"
A 31-member Select Committee, chaired by Bharatiya Janta Party National Vice President Baijayant Panda, has been tasked with reviewing the bill. Their mandate includes examining the bill's implications for privacy and its alignment with India's legal framework. The bill, part of a broader effort to modernise and simplify tax laws, has nevertheless faced backlash for its potential to infringe on personal freedoms. Critics argue that the lack of requirement for a warrant prior to accessing personal data is a significant overreach.
What does the new Bill say
The introduction of "virtual digital spaces" is a key aspect of the new bill, enabling officers to access various digital platforms such as emails, social media, cloud storage, and online financial accounts to investigate suspected cases of tax evasion. The bill aims to combat modern tax evasion tactics, but raises concerns about striking a balance between enforcement and individual privacy. This increased enforcement authority is outlined in Section 247 of the Income Tax Bill, 2025, expanding upon the existing Section 132 of the Income Tax Act, 1961.
Clause 247 of the bill specifically empowers tax officers to bypass security measures on digital platforms, accessing everything from emails and social media to financial and trading accounts. Supporters of the bill argue it is necessary for combating tax evasion and streamlining tax administration.
However, many have highlighted the risks of such sweeping powers being used to settle political scores or intimidate citizens, reminiscent of concerns raised during the Pegasus spyware investigations. The government has countered these criticisms by emphasising the bill's role in enhancing transparency and accountability in tax processes.
As the debate over the bill continues, stakeholders from various sectors, including legal experts and civil rights organisations, are calling for a more balanced approach that safeguards individual privacy while addressing the state's legitimate interests in tax collection. The ongoing discussions within the Select Committee and the public sphere will likely shape the final form of the legislation and its implementation protocols.