Balancing Tax Enforcement with Digital Privacy: India’s New Income Tax Bill Sparks Debate

India’s Income Tax Bill 2025, introduced in the recent Budget session, proposes to extend tax authorities’ powers to search and seize not only physical assets but also individuals’ digital spaces — including social media, emails, and cloud storage — during investigations.

The government argues this move is essential to bridge the gap between physical and digital financial activities, deter money laundering, and formalize tax authorities’ powers with clear legal procedures.

However, serious concerns are emerging about digital privacy and individual rights:

✅ Accessing personal digital accounts exposes not only individuals but also their families, professional networks, and confidential data.

✅ It risks violating the right to privacy upheld by the Supreme Court in the Puttaswamy judgment.

✅ Open-ended terms like “any other space of similar nature” could enable overreach and misuse of power.

✅ The lack of prior judicial oversight, unlike safeguards in countries like Canada, undermines proportionality and accountability standards.

While fighting tax evasion and black money is vital, any intrusion into private digital lives must satisfy strict proportionality, necessity, and legality tests — ensuring state power doesn’t erode fundamental rights.

As India navigates the digital economy, can we strike a balance between robust tax enforcement and protecting citizens’ privacy?

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