On August 11, 2025, the Lok Sabha pushed through the Income-Tax (No. 2) Bill, 2025, replacing the old law.

The pitch?

Simplification.

The new law trims the code down to 536 sections, introduces a single “Tax Year,” keeps the ₹12 lakh exemption, and promises speedier refunds, clearer deductions, and faceless digital-first assessments.

On the surface, it sounds like a clean, modern tax system. But dig a little deeper, and you’ll find five features that chip away at our right to privacy.

1. Your “Virtual Digital Space” is Fair Game

The bill lets tax officers look into emails, cloud drives, social media, even your crypto wallets and trading accounts.

The worry: This opens up your entire digital life, with no clear limits on what they can take.

2. Passwords Don’t Protect You (Clause 247)

If you don’t hand over access, officers can now override passwords and break into your devices.

The worry: Phones and laptops hold more than financial records — they’re our diaries, our health logs, our private conversations. Without checks, this is a free pass to surveillance.

3. “Clarification” that Expands Search Powers

The government insists these aren’t new powers, just clearer ones. But redefining what counts as “digital space” massively expands what can be touched.

The worry: Old powers, yes. But supercharged for the tech era.

4. Faceless, Digital-First Enforcement

Everything is now faceless: assessments, inquiries, appeals.

The worry: Cutting human discretion is good. But when algorithms decide and systems are opaque, how do you even know why you’re penalized? And how do you fight back?

5. Rushed Through Parliament

The Bill passed in minutes, with almost no debate. The Rajya Sabha nodded it through the very next day.

The worry: Laws that redefine state power over citizens need debate. This got none.

The Bigger Picture: Efficiency or Surveillance?

Digital-first governance isn’t bad in itself. But when you mix faceless systems, expanded search powers, and a law passed with zero scrutiny — what you get is efficiency cloaking surveillance.

Without judicial oversight, clear safeguards, and citizen recourse, the system risks becoming opaque and unaccountable.

Why You Should Care

India’s Supreme Court has already said: privacy is a fundamental right (Justice K.S. Puttaswamy vs. Union of India, 2017). This Bill brushes up dangerously close to that line.

If tax reform is meant to be “S.I.M.P.L.E.,” then the “P” should stand for Privacy, not Prying.

Yes, India needs a simpler tax system. But not one that treats every citizen’s digital life as fair game. The modernization we deserve is one that makes taxes clearer, not one that normalizes state surveillance.