New Tax Bill: Clarifying Misconceptions of Digital Privacy Breaches

The new Income Tax Bill reiterates existing powers for tax authorities to access digital spaces during search and survey operations, without breaching the privacy of taxpayers under scrutiny. Misconceptions about additional powers have been dismissed, emphasizing that these measures target tax evasion, not digital snooping.

The Income Tax Department has clarified that the new Income Tax Bill does not infringe on the digital privacy of ordinary taxpayers. Despite concerns, the Bill merely reiterates existing powers from the 1961 Act, allowing for digital access strictly during search and survey operations.

Contrary to recent reports, the Bill does not grant 'additional' powers to tax authorities to breach passwords or digital privacy. Instead, it specifically targets cases where individuals being searched refuse to disclose necessary digital access information. This power is pivotal in gathering evidence of tax evasion.

Officials emphasize that search actions are limited and not directed at most taxpayers, with only about 1% of roughly 8.79 crore annual returns subjected to scrutiny. The Bill's aim is to streamline and simplify tax laws, combating sophisticated digital-based tax evasion effectively without breaching taxpayer privacy.

(With inputs from agencies.)