Opinion
Mint Quick Edit | Income tax: How close should authorities look?
Summary
- India must simplify taxation but the new Income Tax Bill needs a closer look to check if its ‘virtual digital space’ provision could violate the privacy of taxpayers.
While India’s new Income Tax Bill broadly deserves praise for attempting to simplify the law, one provision could ruffle feathers. It makes it a must for an assessee to share computer access codes during search and seizure operations and gives taxmen authority to access the taxpayer’s “virtual digital space."
Also Read: Simplify, simplify, simplify: The mantra of India’s Income Tax Bill
This is reportedly envisaged as a broad term, including email, online trading as well as investment accounts and cloud servers. To be sure, authorities are known to do this anyway, demanding such access from assessees under scrutiny.
Also Read: Mint Explainer: The digital personal data protection Act, its rules, and roadblocks
It was contentious because the law doesn’t provide explicit backing for it. The new bill makes it explicitly legal by putting it in black and white. This, however, could take us down a slippery slope. While the objective may be to use such authority selectively in cases getting a look-in, it could be misused for peeks into the personal data of taxpayers.
Also Read: Privacy as priority: India can’t afford any further delay in notifying data protection rules
One’s “virtual digital space" can conceivably be stretched to cover plenty that would amount to a privacy invasion. The legal provisions that guard people’s digital footprints are designed mostly to keep private-sector data misuse at bay. Lawmakers must take a closer look at this proposal. Proceed cautiously.
