The proposed Income Tax Bill, 2025, is set to replace the existing Income Tax Act of 1961. This legislation has sparked significant debate, especially due to the introduction of Clause 247, which grants tax officials extensive access to citizens' digital accounts without judicial oversight. This aspect has become a major point of concern among privacy advocates and legal experts.
Clause 247 is a particularly controversial component of the bill. It allows tax officials to access a variety of digital spaces—ranging from emails and social media to cloud storage and online financial accounts—if they suspect financial misconduct. What makes this clause contentious is the absence of the requirement for a court order or any judicial oversight, raising red flags about potential misuse.
Under Clause 247, tax officials can scrutinize numerous digital platforms, including:
The government defends this broad access as a necessary tool in combating sophisticated tax evasion strategies, particularly those emerging in the digital age, like cryptocurrencies and offshore accounts. They argue that these powers are essential to effectively address and curb these advanced forms of evasion.
Privacy concerns are at the forefront of the debate surrounding this bill. Critics argue that the lack of judicial oversight could lead to potential abuse of power. There's a fear of increased surveillance and the erosion of digital privacy, akin to authoritarian regimes. Additionally, this law might be used for intimidation or harassment of citizens.
In contrast to India, many democratic nations like the United States, Canada, and members of the European Union mandate judicial warrants or court orders for tax authorities to access private digital data. The absence of such safeguards in India marks a significant deviation from international norms.
Without judicial checks, there's a risk of arbitrary surveillance, as tax officials are endowed with unilateral access to personal data. This could potentially lead to harassment. Legal experts anticipate constitutional challenges, referencing the Supreme Court's recognition of privacy as a fundamental right and arguing that Clause 247 conflicts with principles of legality, necessity, and proportionality.
If the bill is passed, it is expected to take effect on April 1, 2026. Privacy advocates have voiced their concerns, labeling the bill as a dangerous overreach of governmental power that threatens fundamental rights and pushes India towards a surveillance state. They emphasize that the absence of judicial oversight is a critical flaw that could be exploited to harass citizens.
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