The Income-Tax Bill 2025 introduces enhanced digital surveillance, allowing the Income Tax (I-T) Department to scan social media, emails, trading activity, and bank accounts to detect potential tax evasion. While this move aims to improve tax compliance and curb fraud, it raises concerns about privacy and taxpayers’ rights.
So, what rights do taxpayers have under this new system? Let’s break it down.
What Does the Income-Tax Bill 2025 Allow?
The new bill empowers tax authorities to:
- Monitor social media activity to track undisclosed income (e.g., luxury purchases, travel expenses).
- Analyze emails and online transactions for suspicious financial activity.
- Track bank deposits, withdrawals, and stock market trades to identify discrepancies in tax filings.
This means the I-T Department will rely on AI-driven analytics and digital forensics to identify potential tax violations. However, taxpayers are still protected by legal rights to ensure fairness and due process.
Taxpayers’ Rights Under the New Law
1. Right to Privacy and Data Protection
- While tax authorities can monitor digital activity, they must follow legal protocols under the Information Technology Act and Right to Privacy (as upheld by the Supreme Court in the Puttaswamy case).
- Any unauthorized access to personal data can be challenged legally.
2. Right to Be Notified Before Action
- If flagged for investigation, taxpayers must receive a formal notice from the I-T Department.
- Authorities cannot take direct action (like freezing accounts) without following proper legal procedures.
3. Right to Explanation and Appeal
- If discrepancies are found, taxpayers have the right to explain their financial transactions before any penalty is imposed.
- If dissatisfied with the I-T Department’s decision, they can appeal to the Income Tax Appellate Tribunal (ITAT) or higher courts.
4. Right Against Unjustified Scrutiny
- The I-T Department cannot harass taxpayers or conduct investigations without valid reasons.
- Random checks must comply with rules set by the Central Board of Direct Taxes (CBDT).
5. Right to Seek Professional Assistance
- Taxpayers can consult chartered accountants, tax lawyers, or financial advisors to respond to scrutiny and avoid penalties.
How to Protect Yourself from Unwanted Tax Scrutiny
- Ensure all financial transactions are reported accurately in tax filings.
- Maintain digital records of income, expenses, and investments.
- Be cautious of displaying excessive wealth on social media, as this can trigger tax scrutiny.
Conclusion
The Income-Tax Bill 2025 introduces increased digital monitoring, but legal rights still protect taxpayers. While compliance is essential, individuals must also be aware of their rights to privacy, due process, and fair treatment. Staying informed and consulting tax professionals can help navigate this evolving tax landscape effectively.
