Starting in April 2026, tax officers in India may be able to force open not just your safes and filing cabinets but also your WhatsApp, cloud storage, and encrypted chats. This isn’t some covert surveillance programme. It is Clause 247 of the new Income Tax Bill. Framed as a digital update to enforcement powers, Clause 247 allows “authorized officers” to override passwords, break digital locks, and access cloud systems if they merely suspect that someone is concealing income. In other words, suspicion alone, not a court warrant, could soon be enough to justify prying into your private life.

Finance Minister Nirmala Sitharaman has defended the provision by citing wins – Rs 200 crore in undeclared funds exposed via WhatsApp messages, hidden cash traced through Google Maps data, and luxury vehicles tracked through Instagram profiles. But isolated victories don’t justify systemic overreach. This clause treats everyday digital tools used by students, freelancers, small business owners, and families as potential hiding spots for tax evasion. A start-up founder using Signal for client communications or a gig worker storing invoices in cloud drives may find themselves under suspicion, not because of wrongdoing, but because they use encryption.

Advertisement

The government argues it is simply modernizing enforcement. But there is a massive difference between entering someone’s home with probable cause and rummaging through their chats, contacts, and GPS trails without judicial oversight. It is not just about access, it is about trust, proportionality, and rights. And here’s the risk: once warrantless digital intrusion for taxes becomes a norm, it will get easier for other agencies to follow suit. Today, it is the Income Tax Department. Tomorrow, it could be any branch of government with a “reason to believe.” This is not just theoretical.

In the U.S., law enforcement has issued “geofence warrants” to Google, sweeping up data from every device near a location. One cyclist was wrongly flagged as a suspect simply for riding through an area. In the UK, the encrypted messaging app Signal refused to comply with data handover requests because it physically could not access the content even if it wanted to. The difference? These governments at least pretend to put such access through judicial scrutiny. India’s Clause 247 skips that step. It lets tax officials, not judges, decide when and how your digital life can be searched.

And that’s a dangerous precedent. From a consumer perspective, this erodes confidence in India’s digital economy. People are encouraged to go cashless, use UPI, store documents online, and interact with digital public infrastructure. But if those same platforms are now open to intrusion, users will think twice, and innovators may think twice about building here. Similar pushback has been seen globally. When countries like Australia and the UK proposed backdoors into encryption for law enforcement, tech companies warned of weakened security and declining user trust.

If India follows the same path, it risks hindering innovation and undermining its own vision of a tech-first economy. The solution isn’t to cripple privacy tools or treat encrypted communication as suspicious. It is to make tax compliance simpler, smarter, and rights-respecting. Better data analytics, clearer tax codes, and courtsupervised processes, not administrative access to your phone, are the way forward.

Clause 247 may be intended to fight black money, but in practice, it creates a digital dragnet where every consumer is a suspect. It risks turning your cloud storage into a crime scene and your chats into state property. “Privacy isn’t a loophole. Encryption isn’t a red flag. And your rights don’t end where your data begins”. (The writer is Indian Policy Associate, Consumer Choice Center.)