Revised Income Tax Bill: Balancing Simplification with the Right to Privacy
UPSC Relevance
Prelims: Indian Polity & Governance (Fundamental Rights - Article 21, Right to Privacy, Puttaswamy Case; Parliamentary Committees - Select Committee), Indian Economy (Taxation, Tax Reforms).
Mains:
GS Paper 2: Government policies and interventions for development in various sectors; Parliament and State legislatures—structure, functioning, conduct of business, powers & privileges and issues arising out of these; Structure, organization and functioning of the Executive.
GS Paper 3: Indian Economy and issues relating to planning, mobilization of resources, growth (Taxation is a key part of resource mobilization).
Key Highlights from the News
Key Legislation: The Lok Sabha has passed the revised Income Tax Bill, 2025, aiming to simplify and rationalize the existing Income Tax Act, 1961.
Simplification: The new bill significantly reduces the number of words, chapters, and sections.
Controversial Provision:
Grants more powers to income tax officials during search and seizure operations.
Officials have the authority to request access codes for electronic documents.
In case of non-disclosure of passwords, officials are authorized to override the access code to access computer systems, which may lead to intrusion into individuals' emails and social media accounts.
Constitutional Concern: Criticism has arisen that this provision violates the Right to Privacy, declared a fundamental right by the Supreme Court in the Puttaswamy case.
Role of Select Committee: This bill was examined by a Select Committee. Some members of the committee had submitted dissent notes against these provisions.
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