The Income Tax Department may soon have the legal authority to access individuals’ social media accounts, personal emails, bank accounts, and online investments if they suspect tax evasion. The proposed provision, outlined in Clause 247 of the new Income Tax Bill, grants tax officers the power to override access codes to enter digital spaces where passwords are unavailable.
This has sparked widespread concerns among legal experts and privacy advocates, who warn that the bill could lead to intrusive government surveillance and pose a serious threat to individual privacy.
What Does the New Tax Bill Propose?
The bill provides tax officials with extensive search and access powers beyond just physical properties. It explicitly defines “virtual digital space” to include:
- Email servers
- Social media accounts
- Online banking and trading accounts
- Websites storing asset ownership details
- Cloud storage and remote servers
- Digital application platforms
Additionally, tax officers will also have the authority to break open locks of any doors, safes, or digital accounts during an investigation.
Who Can Exercise These Powers?
The bill defines the following officials as “authorised officers” who can carry out such investigations:
- Joint Director / Additional Director
- Joint Commissioner / Additional Commissioner
- Assistant Director / Deputy Director
- Assistant Commissioner / Deputy Commissioner
- Income-Tax Officer / Tax Recovery Officer
Privacy and Legal Concerns Raised by Experts
1. Potential Violation of the Right to Privacy
Prateek Bansal, a taxation expert at White & Brief, highlighted that this provision could violate the fundamental right to privacy, as upheld by the Supreme Court in the landmark Puttaswamy judgment.
He stated:
“Allowing tax officers to access private social media and email accounts raises significant concerns under the fundamental right to privacy.”
This could set a dangerous precedent where government agencies have unchecked access to personal digital spaces.
2. Chilling Effect on Freedom of Speech
Legal experts also warn that the bill could lead to self-censorship, where individuals hesitate to post content online out of fear that it may be misinterpreted as disproportionate income.
Shaily Gupta, a partner at Khaitan & Co, pointed out:
“Broad powers could lead to intrusive actions, including political profiling or misinterpretations—such as associating exotic foreign travel or gifts with disproportionate income levels.”
This raises concerns under Article 19(1)(a) of the Constitution, which guarantees freedom of speech and expression.
3. Risk of Arbitrary Government Surveillance
Sohail Hasan, a Delhi High Court advocate, called the bill “groundbreaking and highly controversial,” warning that it grants authorities “unchecked power” to invade private digital assets under loosely defined “specific circumstances.”
He cautioned:
“This bill could redefine personal privacy as we know it, all in the name of cracking down on tax evasion.”
Similarly, Ketan Mukhija, senior partner at Burgeon Law, noted that the provision lacks judicial oversight and could be used for arbitrary scrutiny rather than structured tax enforcement.
He argued that:
“Without proper safeguards, this provision circumvents protections established by the Supreme Court in the People’s Union for Civil Liberties (PUCL) v. Union of India case.”
He further stressed the need for judicial oversight to prevent the misuse of these powers.
What Could This Mean for Citizens?
If this bill is passed, the Income Tax Department could have unprecedented access to individuals’ digital and financial information, leading to:
- Increased government surveillance over social media and private communications
- Potential misuse of tax investigations for political or personal motives
- Fear-driven self-censorship among citizens, affecting freedom of speech
- Lack of clear legal safeguards, making individuals vulnerable to arbitrary investigations
Legal experts argue that the government must introduce robust safeguards, including judicial oversight, strict procedural guidelines, and transparency, to prevent abuse of these new powers.
The new Income Tax Bill has sparked serious privacy concerns as it grants the Income Tax Department broad surveillance powers over individuals’ digital and financial assets. While the government argues that these measures will help tackle tax evasion, critics warn that they could lead to unprecedented intrusion into private lives, suppression of free speech, and potential government overreach.
Without clear safeguards and judicial oversight, this provision risks undermining fundamental rights and could transform tax enforcement into a tool for arbitrary digital surveillance. As the debate unfolds, it remains to be seen whether the government will address these concerns before implementing the law.
