The Narendra Modi-led NDA government has introduced the new Income Tax Bill, 2025, in the Lok Sabha, promising to modernize tax enforcement. While the bill aims to curb tax evasion by expanding surveillance capabilities, its provisions raise serious concerns about privacy and overreach. At the heart of the government’s justification is the claim that digital evidence from WhatsApp messages, Google Maps history, and Instagram accounts helped uncover unaccounted wealth. Finance Minister Nirmala Sitharaman has emphasized that these technological tools assisted in exposing Rs 200 crore linked to crypto assets and another Rs 250 crore in undisclosed money. However, using this rationale to grant sweeping powers to tax authorities is a slippery slope that threatens the fundamental rights of citizens. The bill grants tax officers unprecedented authority to access private communication platforms such as WhatsApp, Telegram, and email accounts. It further allows them to override security codes and enter virtual digital spaces, including online investment platforms and encrypted messaging services. This level of intrusion is deeply troubling and sets a dangerous precedent for government surveillance under the guise of tax enforcement.
One of the most alarming aspects of the bill is its broad and vague definition of “undisclosed income,” which now includes digital tokens and cryptocurrencies. India has yet to establish a clear regulatory framework for cryptocurrencies, making it unfair and arbitrary to classify them as undisclosed income without proper guidelines. By criminalizing digital assets before defining their legal status, the government is fostering confusion and potential misuse of power. Beyond its direct implications on tax enforcement, the bill is a stark violation of individual privacy. The right to privacy, upheld by the Supreme Court as a fundamental right, is at serious risk if tax authorities are allowed to monitor digital communications without stringent oversight. Unlike criminal investigations that require judicial approval for surveillance, this bill hands tax officers unchecked power to pry into citizens’ digital lives. Furthermore, the bill undermines business confidence. Entrepreneurs, especially those in the fintech and crypto sectors, may find themselves under undue scrutiny, deterring innovation and investment. Foreign investors are likely to view India’s aggressive stance on digital assets as a sign of regulatory uncertainty, driving capital away to more crypto-friendly nations. While cracking down on tax evasion is necessary, the government must strike a balance between enforcement and civil liberties. The new bill, in its current form, tilts too far towards state control, endangering privacy and creating potential avenues for misuse. Instead of sweeping surveillance, a more transparent, judicially supervised mechanism should be put in place to ensure tax compliance without infringing on fundamental rights. In its pursuit of financial transparency, the government must not trample upon the very freedoms that define a democratic society. The new Income Tax Bill is not just a tax law—it is a dangerous overreach that must be reconsidered before it erodes citizens’ trust and privacy beyond repair.