Black Money Check for Tax Clearance Before Departing From India

The Union Budget 2024 underpins the continuing focus on growth-oriented policies with a strong emphasis on infrastructure, tourism, space industry, energy, and agriculture.

While inclusive development is prioritized and the Budget emerges as a boon in the form of women-centric schemes, employment, and skilling for the youth, a reduction in the corporate tax rate, a reduction in customs duties on precious metals, etc., may stand incongruous with the significant changes in taxes in other areas.

The significant changes include reducing the long-term capital gains tax on property and gold from 20% to 12.5%, increasing the short-term capital gains on equity-related investments from 15% to 20%, and increasing the tax rate on long-term capital gains from 10% to 12.50%.

Additionally, the government has removed the indexation benefit for immovable property, reduced the holding period for bonds, debentures, and gold from 36 months to 24 months, and abolished the angel tax. The proposed measures aim to streamline India’s tax structure and ensure increased compliance; however, effective and robust tax administration is a must to bring an impact to these glaring tax adjustments.

The proposed tax simplification measures include the Vivad Se Vishwas Scheme 2024 for settling direct tax disputes. The proposed measures also include the decriminalization of late payment of tax deducted at source and the depenalisation of non-reporting of small foreign assets, defined as foreign assets or foreign assets other than immovable property, where the aggregate value does not exceed INR 20 lakh.

Alternatively, the proposed measures have reinforced and rigidified provisions pertaining to tax clearance certificates, which are required to be obtained at the time of one’s departure from India.

According to data published by the Ministry of External Affairs, as of June 2023, a total of 87,026 Indians have renounced their Indian citizenship. To mitigate potential revenue loss from these individuals leaving India without paying taxes, the Income-tax Act, 1961 (“I-T Act”), includes specific provisions. These measures ensure there is no loss to the revenue, thereby maintaining financial integrity and compliance with tax laws.

Currently, as per the first proviso to Sub-section (1A) of Section 230 of the I-T Act, a person domiciled in India at the time of his departure from India will not be permitted to leave the country without obtaining a Tax Clearance Certificate from the income tax authorities, if, in the authority’s opinion, it is necessary in light of existing circumstances. This Certificate would state that he has no liabilities under the I-T Act, or the Wealth-tax Act, 1957, or the Gift-tax Act, 1958, or the Expenditure-tax Act, 1987, or satisfactory arrangements have been made by him to pay such dues.

Under the second proviso, it is made clear that the authority would be required to a) record reasons and b) obtain prior approval of the Principal Chief Commissioner or Chief Commissioner of Income Tax.

The circumstances in which the Tax Clearance Certificate may be required to be obtained, as delineated by the Central Board of Direct Taxes (CBDT) vide Instruction No.1/2004 dated February 5, 2024, are as follows:

  • Person is involved in serious financial irregularities, his presence is necessary for an investigation under the I-T Act or the Wealth-tax Act, 1957, and a tax demand will likely be raised against him; or
  • Direct tax arrears exceeding INR 10 lakh are outstanding against him which have not been stayed by any authority.

The Finance Bill, 2024, proposes an amendment to the first proviso to Sub-section (1A) of Section 230 of the I-T Act to bridge the lacuna by inserting and including liabilities arising under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, within its ambit, for the purposes of obtaining a Tax Clearance Certificate, beginning on October 1, 2024.

The New India vision which advocates a corruption-free economy recognises the urgent need to address the issue of undisclosed foreign income and assets accumulation outside India.

The implementation of this measure will ensure and enhance adherence to tax compliance, reinforcing the government’s efforts to effectively address tax evasion and the concealment of foreign assets. Consequently, this amendment aims to curb the placement of black money outside India. Domiciled Indians planning to leave the country must exercise caution and be vigilant about the new compliance requirements. It is imperative that they adhere to these regulations by thoroughly disclosing all foreign assets. Failure to comply with these requirements could result in significant penalties. Therefore, ensuring full compliance will not only help them avoid legal repercussions but also maintain their good standing with tax authorities.

The proposed amendment will not only help boost the quantum of collection of revenue by the government, but it will also increase the tax base of the government.

While the proposed budget enhances revenue collection by the government and strengthens compliance measures, its impact on investments and savings is yet to be determined. The effectiveness of these changes and measures will fundamentally rely on a robust tax administration, simplified filing and reporting norms, and their proper implementation. Additionally, it is crucial to balance these efforts with the need to sustain economic growth and mitigate any unintended negative consequences.

Image Credits:

Photo by Terrence Bowen on Pexels

While the proposed budget enhances revenue collection by the government and strengthens compliance measures, its impact on investments and savings is yet to be determined. The effectiveness of these changes and measures will fundamentally rely on a robust tax administration, simplified filing and reporting norms, and their proper implementation. Additionally, it is crucial to balance these efforts with the need to sustain economic growth and mitigate any unintended negative consequences.

Related Posts

POST A COMMENT

Fund Regime in GIFT City: Extension of Green Channel Route

The International Financial Services Centres Authority (IFSCA) vide circular dated April 5, 2024, extended the green channel route to all restricted schemes (non-retail) and special situation funds under the IFSCA (Fund Management) Regulations, 2022.[1] This extension within the fund regime at GIFT IFSC marks a significant development, aiming to streamline and expedite regulatory processes. IFSCA’s initiative fosters a more efficient environment for fund management activities and seeks to enhance ease of doing business, thereby attracting greater investment into GIFT City’s burgeoning financial ecosystem.

This article explores the key changes introduced by IFSCA through this circular and examines their implications for fund management activities within the IFSC.

Green channel extension

When schemes are under a green channel, the schemes filed can be open for subscription by investors immediately upon filing with the Authority. This does away with the requirement to file the placement memorandum before 21 working days of the scheme’s launch. During this period, the Authority may endeavour to share its comments, which the fund management entity (FME) has to incorporate in the placement memorandum.

Prior to the issuance of the circular, the filing of scheme documents was possible under the green channel route only in the following scenarios:

  • Venture capital schemes launched by FMEs through private placement.[2] These invest primarily in unlisted securities of start-ups, emerging or early-stage venture capital undertakings mainly involved in new products or services, technology or IPR-based activities, etc.[3]
  • Restricted schemes (non-retail) soliciting money only from accredited investors.[4] The other restricted schemes were not eligible under the green channel route.

However, the circular provides that all the schemes or funds under Chapter III, excluding retail schemes (under Part C), may be launched after filing the private placement memorandum (PPM) along with other documents ensuring minimum disclosures and other requirements specified in the circular. This includes venture capital schemes under Part A, restricted schemes (non-retail) under Part B, and special situation funds under Part D. While venture capital schemes were already under the green channel, the IFSCA has extended it to special situation funds and all restricted schemes (non-retail), i.e., not just those soliciting money from accredited investors.

Other key aspects

  • The PPM of the scheme or fund has to contain certain minimum disclosures covering investment objectives, NAV determination, legal, regulatory and tax considerations, and so on. Notably, a disclaimer on the cover page should specify that the filing of the PPM is for the purpose of record and is not to be construed as cleared or approved by the Authority.
  • The application form in Annex A and documents in Annex B are to be submitted. This format of application replaces the one specified in February of last year.[5] Once the application is received, a letter of acknowledgement will be issued.
  • The validity of the PPM may be extended beyond six months by refiling the documents and paying the applicable fee.
  • Scheme filing fee to be remitted in US Dollars.
  • A web portal would soon be set up for filing of scheme documents before an offer is made.
  • Apart from the circular from February 2023 referred to earlier, the circular mandating FMEs to seek authorisation for each scheme filed under Chapters III, IV, and V of the Regulations, has also been subsumed.[6]

Conclusion

With this circular, IFSCA has sought to strike a balance by extending the green channel route to all restricted schemes (non-retail) and special situation funds, and at the same time ensuring that a disclaimer is placed on the placement memorandum’s cover page to dispel any notion that it has been approved by the Authority. Moreover, the declaration-cum-undertaking that is part of the application form requires the authorised representative of the FME to confirm that the FME will at all times comply with the Fund Management Regulations and the subsidiary directions issued thereunder.

References:

[1] Circular bearing F. No. IFSCA-AIF/32/2024-Capital Markets, dated April 5, 2024, can be accessed here.

[2] Regulation 19(2)

[3] Regulation 18(1)

[4] Regulation 31(3)

[5] Circular bearing No. IFSCA/1/2023-Capital Markets, dated February 6, 2023, can be accessed here.

[6] Circular bearing No. IFSCA-AIF/47/2023-Capital Markets, dated September 15, 2023, can be accessed here.

Image Credits:

Photo by Wichayada Suwannachun on Canva

With this circular, IFSCA has sought to strike a balance by extending the green channel route to all restricted schemes (non-retail) and special situation funds, and at the same time ensuring that a disclaimer is placed on the placement memorandum’s cover page to dispel any notion that it has been approved by the Authority. Moreover, the declaration-cum-undertaking that is part of the application form requires the authorised representative of the FME to confirm that the FME will at all times comply with the Fund Management Regulations and the subsidiary directions issued thereunder.

Related Posts

POST A COMMENT

Infrastructure and Financing Highlights in Union Budget 2024

The Union Budget 2024 reiterates the growth story of India with lower and more stable rates of inflation. The four sector focus, namely, employment, skilling, Micro, Small and Medium Enterprises (MSMEs) and the middle class, has been a touchstone in the Union Budget 2024. In its pursuit of a progressive and advanced India, the proposal has detailed the 9 priorities to achieve a ‘Viksit Bharat’, namely, inter alia, employment and skilling, manufacturing and services, urban development, energy, and infrastructure.

One of the priorities on which future budgets would be based includes well-rounded, all-inclusive development in the field of infrastructure. The Union Budget 2024 aims to provide strong fiscal support to infrastructure with an allocation of 3.4% of GDP in line with the Interim Budget. As a part of this endeavor, road connectivity projects and power projects have been proposed. Bihar is set to witness airports, medical colleges, and sports infrastructure, assisted by financing from multilateral development banks. Promotion of industrial development in Andhra Pradesh and financing for essential infrastructure such as water, power, railways, and roads are likely to take shape soon. Long term interest-free loans will be extended to the states in order to enable resource allocation for infrastructure investment.

The budget also supports funding for infrastructure by the private sector through PPP mode via Viability Gap Funding (VGF). The formulation of enabling policies and regulations to promote private sector funding in infrastructure has also been suggested. Foreign Direct Investment (FDIs) and overseas investment are proposed to be simplified, especially to promote the utilization of Indian currency for overseas investment.

The MSMEs have been emboldened with various measures, such as collateral free loans for availing of term loan facilities, self-financing guarantee funds, guarantees backed by government-promoted funds, provisions for further conversion of trade receivables to cash, enhancement of loan limits, and financing expansion through the Small Industries Development Bank of India. Facilitation of international trade has been envisaged through the setting up of e-commerce export hubs in public-private partnership (PPP) mode.

Furthering the development of the infrastructure, the sanction of 12 industrial parks under the National Industrial Corridor and plug-and-play industrial parks in 100 cities has been given impetus. PPP has also been identified as the mode for providing accommodation to industrial workers along with VGF support. Reforms pertaining to ownership and leasing have been proposed in the shipping industry.

The Union Budget 2024 visualizes cities as the petri dish for growth hubs achieved through urban development in the form of brownfield redevelopment of existing cities and transit-oriented development. The Union Budget 2024 also propagates bankable projects pertaining to water supply, sewage treatment and solid waste management.

The Union Budget 2024 comprises the proposal to launch of PM Surya Ghar Muft Bijli for installation of roof-top solar in 1 crore households. A framework for promoting pumped storage projects, the transition of industries from the current ‘Perform, Achieve, and Trade’ mode to the ‘Indian Carbon Market’ mode, and climate finance have also been proposed.

The Union Budget 2024 sets the tone for a model economy in the future through industrial development in the eastern region, and the northeastern region is expected to see an expansion of banking services. The Union Budget 2024 also emphasizes irrigation and flood mitigation, along with pilgrim tourism.

Strengthening of debt recovery and speedy resolution of cases through changes in the Insolvency and Bankruptcy Code and setting up further tribunals have been presented.

In the agricultural sector, digital inclusion in the form of digital public infrastructure has been proposed, and financing in this sector is placed with the National Bank for Agriculture and Rural Development. Employment and skilling remain important priorities. The Union Budget 2024 envisages additional employment in the manufacturing sector, benefiting 30 lakh professionals entering the workforce and promoting the female workforce. Additionally, revisions to schemes for skill loans backed by guarantees from government-sponsored funds have been suggested.

Key Takeaways

The Union Budget 2024 focuses on promoting women in the workforce and women-led development to improve the economy. Stamp duty rates have also been proposed to be lowered for properties purchased by women. A roadmap for growth in all the sectors has been laid out through the suggested proposals. With the proper implementation of the 9 priorities, the growth story of India is expected to continue.

Image Credits:

Photo by jamoimages on Canva

The Union Budget 2024 aims to provide strong fiscal support to infrastructure with an allocation of 3.4% of GDP in line with the Interim Budget. As a part of this endeavor, road connectivity projects and power projects have been proposed. Bihar is set to witness airports, medical colleges, and sports infrastructure, assisted by financing from multilateral banks.

Related Posts

POST A COMMENT

Jan Vishwas Amendment: DPIIT Releases Draft Trade Marks Rules

Pursuant to provisions introduced by the Jan Vishwas (Amendment of Provisions) Act, 2023, the Department for Promotion of Industry and Internal Trade (DPIIT) has released draft rules for holding inquiry, imposing penalties, and preferring appeals under provisions of the trademark and geographical indications legislations.[1] Public comments on these draft rules may be shared by August 1. [The final version of the rules has been published; click here and here to read].

The draft patents, trademarks and geographical indication rules unveiled in January of this year have undergone significant revisions.[2] Though the amendments made vide the Jan Vishwas (Amendment of Provisions) Act, 2023, to the IP laws have yet to be brought into force, the DPIIT proceeded to notify amendments to Patents Rules, 2003, in March 2024. Through the Patents (Second Amendment) Rules, 2024, Chapter IX A, on adjudication of penalties and appeals, was introduced. These require complaints regarding contravention committed under Sections 120 (unauthorised claim of patent rights), 122 (refusal or failure to furnish information), and 123 (practice by non-registered patent agents) of the Act to be filed in Form 31. Further, the appeal against the order of adjudicating officer has to be filed in Form 32.

The procedure provided under the Patents (Second Amendment) Rules, 2024, has been retained, with slight changes, in the draft trademark and geographical indication rules notified on July 2, which are summarised below:

Draft Trade Marks (Holding Inquiry and Appeal) Rules, 2024

As per Rule 3 of the draft Trade Marks (Holding Inquiry and Appeal) Rules, 2024, any person may file a complaint pertaining to contravention under Section 107 of the Trade Marks Act, 1999, in Form-I through electronic means to the adjudicating officer. The said Section deals with the penalty for false representation of a trade mark as registered.

Rule 4 contains provisions pertaining to the holding of inquiry. It envisages issuance of a seven-day show cause notice to the person against whom the inquiry is to be conducted, indicating the nature of contravention alleged to have been committed. If, after considering the cause, the adjudicating officer determines that an inquiry has to be held, a notice will be issued calling for the appearance of the person for a hearing on the date fixed in the notice. At this hearing, the contravention, along with the applicable provisions, will be explained. Thereafter, an opportunity will be accorded to file a counter statement and present relevant evidence (document or evidence to be furnished in Form-II).

If the adjudicating officer is satisfied that the person has committed the contravention, he may impose a penalty under the Act via a written order mentioning the specific provisions and the reasons for the penalty imposition. Notably, the proceeding has to be completed within three months of issuance of the notice to the opposite party.

Persons aggrieved by the adjudicating officer’s order may file an appeal, under Rule 5, in Form-III, to the appellate authority within 60 days.

Other important aspects include the electronic transmission of all communications and the mandate to upload every order to IP India’s official website.

Draft Geographical Indications of Goods (Holding Inquiry and Appeal) Rules, 2024

The draft Geographical Indications of Goods (Holding Inquiry and Appeal) Rules, 2024, specifies that any person may file a complaint regarding contravention committed under Sections 38 (falsifying and falsely applying geographical indications), 39 (penalty for applying false geographical indications), 40 (penalty for selling goods to which false geographical indication is applied), 41 (enhanced penalty on second or subsequent conviction), and 42 (penalty for falsely representing a geographical indication as registered) of the Act in Form-I. The remaining provisions are more or less the same as those of the draft Trade Marks (Holding Inquiry and Appeal) Rules, 2024.

Conclusion

The draft rules signify a crucial advancement in the enforcement and management of IP rights in India. By providing structured procedures for filing complaints, conducting inquiries, and appealing decisions, the DPIIT aims to foster a more transparent and efficient system. The emphasis on electronic communication and timely resolutions reflects a modern approach which can enhance stakeholder confidence in the IP ecosystem. Overall, these initiatives not only aim to streamline processes but also to uphold the integrity of trademarks and geographical indications, ultimately contributing to a more robust IP framework in India.

References:

[1] The draft Trade Marks (Holding Inquiry and Appeal) Rules, 2024, and the draft Geographical Indications of Goods (Holding Inquiry and Appeal) Rules, 2024. 

[2] Click here, here and here to download the draft rules from January 2024.

Image Credits:

Photo by olm26250 on Canva

The draft rules signify a crucial advancement in the enforcement and management of IP rights in India. By providing structured procedures for filing complaints, conducting inquiries, and appealing decisions, the DPIIT aims to foster a more transparent and efficient system. The emphasis on electronic communication and timely resolutions reflects a modern approach which can enhance stakeholder confidence in the IP ecosystem. Overall, these initiatives not only aim to streamline processes but also to uphold the integrity of trademarks and geographical indications, ultimately contributing to a more robust IP framework in India.

Related Posts

POST A COMMENT

WIPO Treaty: Safeguarding India’s Traditional Knowledge

On May 24, 2024, the World Intellectual Property Organization (WIPO) approved a Treaty which requires patent applicants to disclose the country of origin or source of the genetic resources on which the claimed invention is based.[1]

Objective

The Treaty aims to establish an international disclosure requirement, ensuring Patent Offices have access to appropriate information to prevent erroneous grants for inventions lacking novelty or inventiveness regarding genetic resources and traditional knowledge associated with genetic resources.

This requirement is also crucial for enhancing the patent system’s efficacy and providing benefits to both providers and users of genetic resources and associated traditional knowledge.

Salient features

  • Enforcement

As per Article 17, the new Treaty will come into force three months after the 15 eligible contracting parties deposit their instruments of ratification or accession. Once it comes into force, the contracting parties will have to lay down the disclosure requirements specified therein.

  • Definition of genetic resources

Under Article 2 of the Treaty, genetic resources are defined as material of plant, animal, microbial or other origin containing functional units of heredity of actual or potential value.

  • Disclosure requirement

Article 3 of the Treaty contains the disclosure requirements to be adhered to by patent applicants.

  1. As per the said Article, if the claimed invention is based on genetic resources, the patent applicant would have to disclose the country of origin of the genetic resources. If such provision does not apply or the applicant does not know the country of origin, the source of the genetic resources must be disclosed instead. Here, the source can be a research centre, gene bank, etc.
  2. If the claimed invention is based on traditional knowledge associated with genetic resources, the patent applicant must disclose the indigenous people or local community who provided the traditional knowledge associated with genetic resources. In case such provision does not apply or if the same is not known to the applicant, the source of the traditional knowledge associated with genetic resources must be disclosed. The source in this context includes scientific literature, publicly accessible databases, patent applications and patent publications.
  • Declaration to be provided if information is not known

As per Article 3.3, the applicant must make a declaration in situations where no such information is known.

  • Opportunity to rectify mistakes

Article 3.4 requires contracting parties to provide guidance to patent applicants on how to meet the disclosure requirement. Further, patent applicants must be granted an opportunity to rectify a failure to include the minimum information mentioned above or correct any erroneous or incorrect disclosures.

  • Patent offices are not to be burdened with disclosure verification

It is specified, under Article 3.5, that the patent office should not be under an obligation to verify the authenticity of the disclosures made in accordance with Article 3.

  • Applicability does not extend to prior applications

Article 4 stipulates that a contracting party shall not impose obligations under this Treaty on patent applications filed prior to its entry into force for that party. This is subject to existing national laws on disclosure applicable to such patent applications.

  • Non-compliance with disclosure requirement

The contracting parties would have to put in place a mechanism to deal with instances of non-compliance with disclosure requirements, as per Article 5.1 of the Treaty.

  • Revocation of patent rights

On a joint reading of Articles 5.3 and 5.4, it is clear that patent rights can only be revoked, invalidated, or rendered unenforceable solely on account of the patent applicant’s failure to disclose information under Article 3 if there is fraudulent intent regarding the disclosure requirements.

  • Possibility of extension to other IP domains 

The possibility of extending the disclosure requirement to other areas of intellectual property can be considered by the contracting parties in the review to be held after four years of the Treaty coming into force.

  • Assembly of contracting parties

Article 10 deals with the Assembly of contracting parties. In the Assembly, the contracting parties will be represented by their delegations. This Assembly is tasked with dealing with matters concerning the maintenance and development of the Treaty and so on.

Hailing this Treaty, the Ministry of Commerce and Industry, in a press release dated May 26, 2024, highlighted that the new disclosure obligations will provide added protection to Indian genetic resources and traditional knowledge. The press release also pointed out that disclosure requirements are currently in place in 35 countries, and most of these are not binding; the Treaty will ensure compliance with disclosure obligations.

Comments

This is yet another remarkable achievement by WIPO in bringing this Treaty, which is to safeguard the genetic resources and traditional knowledge associated with genetic resources worldwide from being erroneously patented. The primary objective of the Treaty is to safeguard the rights of Indigenous people and local communities and protect genetic resources from unauthorised exploitation by third parties.

While the Treaty provides a clear legal framework for the protection of genetic resources, it also fosters international cooperation among member countries to protect each other’s biodiversity by preventing its exploitation by unauthorised parties. This is undoubtedly a significant step.

We hope India and all other eligible member countries will provide accession to the Treaty and make the necessary changes in their respective Patent Laws to ensure the smooth implementation of the Treaty and safeguard our genetic resources.

On a joint reading of Articles 5.3 and 5.4, it is clear that patent rights can only be revoked, invalidated, or rendered unenforceable solely on account of the patent applicant’s failure to disclose information under Article 3 if there is fraudulent intent regarding the disclosure requirements.

Related Posts

POST A COMMENT

Data Protection Board: Insights into Forthcoming DPDP Rules

In the contemporary landscape, where data serves as a fundamental catalyst for innovation and economic growth, the obligation to safeguard personal data has attained paramount importance. Acknowledging this critical necessity, the Government of India has promulgated the Digital Personal Data Protection Act (DPDP Act) in the year 2023. This seminal legislation seeks to meticulously balance the rights to individual privacy with the requirements of technological advancement, thereby effectuating a comprehensive transformation in the digital governance framework of India. The enactment of the DPDP Act represents a significant legislative milestone aimed at addressing the multifaceted challenges associated with personal data protection. By instituting a robust legal framework, the Act endeavours to establish a regulatory environment that not only upholds the privacy of individuals but also encourages an ecosystem favourable to technological innovation.

The DPDP Act is designed to ensure that the collection, storage, and processing of personal data are conducted in a manner that recognizes the privacy of individuals. This legislation introduces stringent measures and procedures to prevent unauthorized access, misuse, and breaches of personal data, thereby reinforcing the trust of individuals in digital platforms and services. Furthermore, the DPDP Act outlines the obligations and responsibilities of entities handling personal data, mandating compliance with prescribed standards and practices. This comprehensive approach is aimed at creating a secure and transparent data processing environment, which is essential for sustaining public confidence and facilitating seamless digital interactions. The transformative impact of the DPDP Act on India’s digital governance landscape is highlighted by its forward-looking provisions, which are designed to keep pace with the rapid advancements in technology. By embedding principles of accountability, transparency, and user consent, the Act aspires to create a balanced regulatory regime that protects individual privacy while enabling the growth of a dynamic digital economy.

Role of the Data Protection Board

A cornerstone provision within the DPDP Act is the establishment of the Data Protection Board, herein referred to as “the Board.” This regulatory body assumes a pivotal role in the enforcement and oversight of data privacy laws across the jurisdiction. Entrusted with the duty to ensure adherence to statutory mandates, the Board serves as a custodian of individual privacy rights and a guardian against potential infringements therein. The scope of responsibility bestowed upon the Board extends beyond mere oversight; it encompasses a proactive stance towards the implementation and enforcement of the DPDP Act. By exercising diligent scrutiny and proactive engagement, the Board endeavours to substitute a culture of compliance and accountability among businesses and individuals alike.

In the dynamic landscape shaped by the DPDP Act, businesses and individuals encounter a spectrum of implications, both advantageous and challenging. The Board, cognizant of this multifaceted terrain, assumes a proactive posture aimed at navigating and mitigating potential risks while harnessing the opportunities presented therein. With a persistent commitment to upholding the tenets of the DPDP Act, the Board adopts a multi-faceted approach towards its mandate. This approach entails the interpretation of comprehensive regulatory frameworks, the provision of authoritative guidance, and the imposition of judicious penalties where warranted.

Moreover, the Board serves as a focal point for stakeholders seeking clarity, guidance, or redressal in matters pertaining to data protection. Through transparent communication channels and accessible avenues for engagement, the Board endeavours to foster a conducive environment for dialogue and collaboration among stakeholders. As custodians of public trust, the members of the Board are vested with the authority to interpret, enforce, and refine the provisions of the DPDP Act. Their collective expertise and unwavering commitment to the principles of fairness, impartiality, and integrity serve as pillars underpinning the efficacy of the regulatory framework.

Key Functions and Powers

The DPDP Act delineates a range of pivotal functions and powers vested in the Data Protection Board, especially concerning instances of personal data breaches. Upon receipt of notification regarding a breach pursuant to Sub-section (6) of Section 8, the Board is empowered to:

Direct Urgent Remedial or Mitigation Measures

The Board is authorized to issue directives aimed at swiftly addressing and mitigating the ramifications of the personal data breach. This may include prescribing immediate remedial actions to contain the breach and prevent further unauthorized access or dissemination of personal data.

Conduct Inquiry into the Nature and Impact of the Breach

The Board is vested with the authority to conduct a thorough investigation into the circumstances surrounding the breach, including its origins, extent, and potential impact on individuals’ privacy rights. Through meticulous inquiry and analysis, the Board seeks to ascertain the root causes of the breach and assess its implications on data subjects and affected entities.

Impose Penalties for Violations

In instances where entities are found to have contravened the provisions of the DPDP Act, the Board is empowered to levy penalties commensurate with the severity of the violation. These penalties may include fines, sanctions, or other punitive measures deemed necessary to deter future breaches and uphold the integrity of the data protection regime.

Furthermore, the Board may exercise discretion in determining the appropriate course of action based on the specific circumstances of each breach, taking into account factors such as the scale of the breach, the degree of negligence or misconduct involved, and the impact on individuals’ privacy rights. By wielding these formidable powers, the Data Protection Board serves as a stalwart guardian of data subjects’ rights and a vigilant enforcer of the DPDP Act. Through judicious oversight and decisive action, the Board endeavours to uphold the principles of data privacy, accountability, and transparency, thereby fostering trust and confidence in the digital ecosystem.

Composition of the Data Protection Board

The establishment of the Data Protection Board stands as a matter of paramount significance, necessitating thorough deliberation and discernment on the part of the Central Government. The composition of the Board assumes particular importance, as it directly influences the efficacy and credibility of its regulatory functions. In accordance with this imperative, the Board shall comprise a Chairperson and other members, each meticulously selected for their distinguished expertise, unimpeachable integrity, and eminent standing within their respective spheres of relevance.

The process of member selection entails a rigorous evaluation of qualifications and competencies, with a view towards ensuring a diverse and multidisciplinary composition reflective of the multifaceted challenges inherent to data protection governance. To this end, members shall be individuals possessing specialized knowledge or substantial practical experience in fields pivotal to the effective discharge of the Board’s mandate. Specifically, expertise in areas such as data governance, administrative practices, consumer protection laws, dispute resolution mechanisms, information and communication technology, the digital economy, and the intricacies of legal frameworks and regulations shall be considered indispensable. Notably, at least one member of the Board must be a legal luminary, possessing a comprehensive understanding of jurisprudential nuances and adeptness in deciphering the intricate legal ramifications of the DPDP Act.

By ensuring a judicious blend of expertise spanning diverse domains, the composition of the Data Protection Board is meticulously crafted to engender robust deliberations, informed decision-making, and comprehensive oversight. The inclusion of members with varied proficiencies not only augments the Board’s capacity to navigate the complexities of contemporary data governance but also fortifies its credibility as a support of integrity and competence in safeguarding individual privacy rights. In adhering to these exacting standards of selection and composition, the Central Government reaffirms its steadfast commitment to fostering a regulatory environment characterized by competence, diligence, and unwavering fidelity to the principles of data protection and privacy preservation. As custodians of public trust, the members of the Data Protection Board shall discharge their duties with the utmost probity and dedication, thereby upholding the sanctity of personal data and advancing the overarching objectives of the DPDP Act.

Operational Procedures and Appointments

The Board shall adhere to meticulously structured procedures for the conduct of meetings and the execution of business affairs, underpinned by a commitment to efficiency and transparency. Embracing contemporary advancements, digital modalities shall be judiciously employed to enhance operational efficacy and foster a culture of openness and accessibility. All directives, mandates, and instruments issued by the Board shall undergo rigorous authentication processes as delineated by forthcoming regulatory stipulations. This authentication mechanism serves as a bulwark against malfeasance and ensures the integrity and validity of all official communications and pronouncements emanating from the Board.

Moreover, in recognition of the dynamic nature of its mandate and the exigencies of operational exigency, the Board reserves the prerogative, subject to requisite approval from the Central Government, to appoint officers and personnel indispensable for the expeditious discharge of its statutory obligations. The appointment process shall adhere to stringent criteria delineated within the forthcoming Rules, which shall encompass considerations of competence, probity, and alignment with the overarching objectives of the DPDP Act. The terms and conditions governing the appointment and tenure of such officers and employees shall be meticulously detailed within the framework of the Rules.

These provisions shall encompass a spectrum of considerations, including but not limited to remuneration, duties and responsibilities, disciplinary mechanisms, and avenues for professional development. By espousing a structured and methodical approach to procedural compliance and personnel management, the Board reaffirms its unwavering commitment to the principles of accountability, efficiency, and institutional robustness. Through adherence to these exacting standards, the Board endeavours to fortify its operational resilience and enhance public confidence in its capacity to safeguard the sanctity of personal data and uphold the principles enshrined within the DPDP Act.

Consent Management

An essential function of the Board will be to determine the authority of Consent Managers. A Consent Manager, registered with the Board, will serve as a single point of contact to enable Data Principals (individuals) to give, manage, review, and withdraw consent through an accessible, transparent, and interoperable platform. The registration process and the technical, operational, financial, and other conditions for Consent Managers will be specified in the upcoming Rules.

A pivotal responsibility incumbent upon the Board is the delineation of the purview and authority vested in Consent Managers. These individuals, duly registered with and regulated by the Board, assume a pivotal role as intermediaries facilitating the interaction between Data Principals, i.e., individuals, and entities seeking consent for the processing of personal data. Endowed with the responsibility to provide a centralized conduit for the management of consent, Consent Managers operate as the linchpin in ensuring the seamless execution of privacy preferences by Data Principals.

The mandate of Consent Managers extends beyond mere facilitation; they are entrusted with the solemn duty to enable Data Principals to exercise informed agency over the disposition of their personal data. Through a comprehensive suite of services encompassing consent provision, management, review, and withdrawal, Consent Managers serve as custodians of individual privacy rights, thereby fostering a culture of transparency, accountability, and empowerment in data processing endeavours. The forthcoming Rules shall furnish detailed prescriptions governing the registration process and delineating the technical, operational, financial, and ancillary prerequisites incumbent upon Consent Managers. These provisions are envisaged to engender a standardized framework conducive to the seamless operation of Consent Managers, thereby fostering interoperability and harmonization across the data processing landscape.

The registration process, envisaged within the regulatory ambit, shall entail stringent evaluation criteria designed to ensure the competence, integrity, and adherence to ethical standards of prospective Consent Managers. Technical standards shall be delineated to ascertain the compatibility, reliability, and security of the platforms deployed by Consent Managers in the execution of their functions. Operational guidelines shall be promulgated to explain the procedural protocols governing the conduct of Consent Managers, ensuring adherence to prescribed norms and standards in the discharge of their obligations. Additionally, financial stipulations shall be articulated to highlight the fiscal viability and sustainability of Consent Manager operations, thereby fortifying their resilience in executing their critical role within the data protection ecosystem.

By promulgating comprehensive regulatory frameworks tailored to the exigencies of Consent Manager operations, the Board reaffirms its unwavering commitment to engendering a data protection regime characterized by integrity, efficacy, and fidelity to individual privacy rights. Through the meticulous calibration of regulatory imperatives, the Board endeavours to foster a culture of responsible data stewardship and promote public trust in the integrity of data processing practices.

Conclusion

The Digital Personal Data Protection Act, 2023, marks a significant step forward in India’s digital governance framework. By establishing the Data Protection Board, the Act aims to ensure robust protection of personal data while promoting responsible data handling practices. As the Central Government finalizes the Rules, careful attention to the Board’s composition, powers, and procedures will be crucial in achieving the Act’s objectives. This balanced approach will not only protect individual rights but also support technological innovation in the digital age.

Image Credits:

Photo by Vertigo3d on Canva

The Digital Personal Data Protection Act, 2023, marks a significant step forward in India’s digital governance framework. By establishing the Data Protection Board, the Act aims to ensure robust protection of personal data while promoting responsible data handling practices. As the Central Government finalizes the Rules, careful attention to the Board’s composition, powers, and procedures will be crucial in achieving the Act’s objectives. This balanced approach will not only protect individual rights but also support technological innovation in the digital age.

Related Posts

POST A COMMENT

What's New in Indian Evidence Law? A Look at BSA, 2023

The Bharatiya Sakshya Adhiniyam, 2023 (hereinafter referred to as the “BSA”) replaces the Indian Evidence Act, 1872 (hereinafter referred to as the “IEA”), which has long been the primary legislation concerning law related to evidence in all proceedings before the Court. This article explores some of the significant changes introduced by the BSA. To ensure better clarity, the authors have included a comparative chart contrasting the provisions of the IEA with those of the BSA, highlighting all the changes made.

Key Additions and Alterations

Definition of Experts

Opinions of experts on the topics as mentioned in Section 45 of the IEA have been getting increasingly relevant with the passage of time due to the development of modern sciences and its deep integration with the entire process of dispensation of justice.[1] Even though expert evidence is not considered conclusive proof in itself, its importance is substantial in proceedings, and it assists the Court in the formation of conclusions, provided that they are in conformity with other direct evidence.[2] Due to its importance, the BSA reproduces the provision regarding the opinion of experts exactly under Section 39, with the addition of the words “or any other field”.

This is a significant change in the literature of expert opinions as now Courts may rely upon expert opinions on any field that requires or necessitates, or is better served with the opinion of an expert, and not just the limited fields that were previously mentioned under Section 45 of the IEA, pertaining to handwriting, science, art, foreign law or finger impressions.

Removal of Archaic and Use of Inclusive Language

The BSA also resolves to alter archaic legal language prevalent in the IEA to replace it with modern[3], acceptable and inclusive words and phrases. One of the examples of this change is Section 124 of the BSA, which replaces Section 118 of the IEA, pertaining to the provision of a competent witness. In the IEA, the explanation of the Section used the word “lunatic” to explain the position with regards to the competency to testify of persons of unsound mind. The BSA has replaced the word with the words “a person of unsound mind”.

Various opinions highlight that the use of words like “lunatic” or “idiot” have a negative impact on how society perceives individuals with mental illnesses, creating a sense of polarisation among them from a functional society.[4] Therefore, the removal of such terms from legislations and thereby from judicial discourse is a positive step expected to foster better integration and acceptance of persons with mental illnesses into society.

Various words and phrases which were linked to India’s colonial past, present in the IEA by virtue of it being drafted by Sir James F. Stephen, have been completely removed and the Sections of the BSA now include language that aptly replaces them. For example, the words “of Her Majesty’s Dominions”, used in Section 86 of the IEA, in the context of the presumption of copies of foreign judicial records, have been removed and are now replaced with the words “of any country beyond India”, under Section 88(1) of the BSA.

Taking Cognizance of the Role of Technology

The advent of technology and its role in all of the major sectors and institutions of the country, including the operation of Courts[5] and other judicial offices is a remarkable and inevitable shift. Various Courts have the facility of a virtual hearing now, and it has smoothly integrated with the regular functioning of such Courts. Keeping this change in mind, the BSA has added “electronic and digital records” within the purview of the definition of “document” under Section 2(d).

Furthermore, even the definition of evidence under Section 2(e) of the BSA has been altered and the words “statements given electronically” have been added, increasing the purview of evidence that can be given in conformity with the fact a lot of exchanges of communication take place digitally, making it only natural to bring those into the fold of the definition of evidence. In line with these changes, the entire BSA includes words such as “digital” in order to include electronic records in the realm of applicability of other provisions.

To bolster the admissibility of electronic evidence, the BSA introduced Section 61, which provides that electronic evidence cannot be declared inadmissible solely by virtue of being in an electronic form.

Other Relevant Changes

The substantive provision of estoppel as given under the IEA from Sections 115-117 has been amended, in particular the provision regarding the prohibition of denial of landlord’s title by the tenant. Under the provision of Section 122 of the BSA, no tenant shall be able to deny that the landlord had a title to the property at the beginning of the tenancy, even after the expiry of the tenancy as well; the estoppel applies not only during the continuance of the tenancy but also at “any time thereafter”.

The provision of facts of which the Courts must take judicial notice, which was given under Section 57 of the IEA, has a new sub-section under Section 52 of the BSA, which provides for international treaties and agreements prevalent in the global diaspora, as well as decisions taken by India at international associations.

The scope of “secondary evidence” under Section 58 of the BSA has been expanded to include oral and written admissions as well, and the evidence of a person who is specifically skilled in examining particular documents.

Other notable provisions include the proviso to Section 165, which prevents Courts from requiring any communication between the Ministers and the President of India to be produced before it; the conspicuous omission of the ‘extent’ or territory (in Section 1) to which the BSA extends; and incorporation of ‘coercion’ in the list of acts under Section 22 that renders an accused person’s confession irrelevant in a criminal proceeding.

Conclusion

The BSA has incorporated significant changes to crucial definitions pertaining to the law of evidence, some of which were much-needed given the dynamics of the changing legal framework of the country. A lot of the alterations and additions have kept in mind the social landscape of the country as well, also ensuring that the country’s colonial past is put behind. A majority of the provisions remain unchanged in their language and application, and the evaluation of the changes made will be better understood with subsequent judicial decisions pertaining to them.

Here is a color-coded table of the changes made:

References:

[1] Meena Ketan Sahu, Importance of Expert Opinion in Criminal Justice System in India with special reference to determination of paternity: A Legal Analysis, RESEARCHGATE (Jun. 5, 2024, 11:26 AM), available here.

[2] S. Gopal Reddy v. State of A.P., (1966) 4 SCC 596.

[3] SANSAD, available here (last visited Jun. 05, 2024).

[4] Kathryn A. LaFortune, Eliminating offensive legal language, 49 MONITOR ON PSYCHOLOGY, 29 (2018).

[5] Brandon Moss, The importance of modernised technology in court proceedings, THOMSON REUTERS (Jun. 05, 2024, 11:38 AM), available here.

Image Credits:

Photo by John Blottman on Canva

The BSA has incorporated significant changes to crucial definitions pertaining to the law of evidence, some of which were much-needed given the dynamics of the changing legal framework of the country. A lot of the alterations and additions have kept in mind the social landscape of the country as well, also ensuring that the country’s colonial past is put behind. A majority of the provisions remain unchanged in their language and application, and the evaluation of the changes made will be better understood with subsequent judicial decisions pertaining to them.

Related Posts

POST A COMMENT

DPDP Act: Rules Governing Significant Data Fiduciaries

The Digital Personal Data Protection Act of 2023 (“the Act”) stands as a cornerstone legislation aimed at bolstering the protection of personal data within a landscape profoundly influenced by technological progressions. However, recognizing the exigency to bridge extant regulatory lacunae and to maintain consonance with the evolving technological milieu, the enactment of detailed regulatory provisions under the aegis of the Act (“the Rules”) assumes paramount significance. This exposition endeavours to explicate the pivotal dimensions of the Rules, with a specific focus on delineating the roles, responsibilities, and anticipated ramifications vis-à-vis entities classified as Significant Data Fiduciaries (SDFs). By elucidating these aspects, this analysis aims to offer stakeholders a comprehensive understanding of the regulatory landscape underpinning the Act, thereby fostering informed compliance and adherence to prescribed norms.

Clarification and Rationalization of Data Processing

Section 4 of the Act provides a structured framework delineating the permissible avenues for data processing, stipulating the imperative requirement of explicit consent from the Data Principal and adherence to bona fide purposes. In recognition of the paramount importance of clarity and transparency in data handling practices, the Rules are vested with the responsibility of articulating the parameters governing legitimate data utilization. Through this regulatory mechanism, the Rules aim to elucidate and rationalize the underlying objectives of data processing endeavours, thereby instilling confidence among stakeholders and fostering a culture of accountability within the data ecosystem.

Identification and Obligations of Significant Data Fiduciaries

The Act confers augmented obligations upon entities designated as SDFs, a classification contingent upon an array of discerning factors. These factors encompass the scale and sensitivity of personal data under their custodianship, the prospective risks posed to the rights of Data Principals, and the broader implications on critical domains such as national sovereignty, electoral integrity, security, and public order. In furtherance of this regulatory imperative, the government, via formal notification, is empowered to define the criteria governing the classification of entities as SDFs. It is envisaged that such criteria may encompass quantitative benchmarks, potentially incorporating thresholds based on user volume, among other pertinent considerations, thereby ensuring a nuanced and contextually relevant determination of SDF status.

Data Protection Impact Assessment and Audits

SDFs are legally obligated to undertake comprehensive Data Protection Impact Assessments (DPIAs), a procedural necessity aimed at evaluating and mitigating potential risks associated with data processing activities. The format and reporting modalities for these DPIAs are poised to be specified by governmental directives, underscoring the imperative for standardized procedures and robust oversight mechanisms. It is envisaged that the oversight of DPIAs will be entrusted to the Data Protection Board, designated as the authoritative body responsible for supervising compliance with data protection obligations.

Furthermore, in consonance with the overarching objective of ensuring robust data governance frameworks, SDFs are further mandated to undergo periodic data audits. The scope, frequency, and depth of these audits are yet to be delineated by regulatory authorities, necessitating a concerted effort to formulate comprehensive guidelines conducive to effective regulatory scrutiny. By instituting regular audits, regulatory authorities aim to ascertain compliance with statutory obligations, identify potential vulnerabilities, and proactively address emerging risks within the data processing ecosystem, thus fortifying the integrity and security of personal data.

Enhanced Cybersecurity Mandates

In order to bolster data security protocols and ensure the sanctity of personal information, SDFs may be compelled to adhere to enhanced cybersecurity standards. This entails stringent compliance with internationally recognized certifications, exemplified by ISO 27001, thereby affirming their unwavering commitment to the establishment and maintenance of robust information security management systems. By embracing such rigorous standards, SDFs underscore their dedication to safeguarding the confidentiality, integrity, and availability of sensitive data assets against evolving cyber threats and vulnerabilities.

Moreover, the imperative to safeguard personal data transcends national borders, necessitating a concerted effort to regulate cross-border data transfers effectively. Recognizing this exigency, the Act confers upon the government the authority to promulgate regulations governing such transfers, premised upon the imperative of instituting stringent safeguards and protection mechanisms. This regulatory prerogative is particularly pertinent in the context of data concerning minors, where heightened levels of diligence and precaution are warranted to uphold their privacy rights and ensure their welfare.

Furthermore, it is anticipated that the Rules will encompass a comprehensive suite of measures designed to ensure alignment with prevailing international standards and best practices in data protection. Such measures may encompass, inter alia, the formulation of robust data transfer agreements, the implementation of encryption protocols, and the imposition of stringent due diligence requirements on data recipients. By adhering to these stringent regulatory mandates, SDFs can engender trust and confidence among stakeholders while mitigating the inherent risks associated with cross-border data transfers, thereby advancing the overarching objectives of data protection and privacy preservation.

Appointment and Responsibilities of Data Protection Officer

Amidst prevailing ambiguities, the designation and specification of duties pertaining to Data Protection Officers (DPOs) persist as pivotal considerations within the regulatory framework. Drawing upon the precedents established by the General Data Protection Regulation (GDPR), it is anticipated that the roles assumed by DPOs under the Act will mirror their counterparts, albeit with nuanced adaptations to suit the operational dynamics of SDFs. Foremost among their responsibilities, DPOs are poised to serve as the linchpins of compliance, facilitating adherence to statutory mandates and ensuring the ethical handling of personal data.

Aligned with their fiduciary obligations, DPOs are envisaged to function as conduits for the dissemination of regulatory directives and best practices, thereby fostering a culture of conscientious data governance within SDFs. Moreover, akin to their counterparts under the GDPR, DPOs are anticipated to serve as the primary channels for grievance redressal, fielding inquiries, and concerns pertaining to data privacy and security. This pivotal role positions them as the custodians of stakeholder trust, entrusted with the task of preserving the integrity and confidentiality of personal information. In addition to their regulatory oversight functions, DPOs are expected to serve as pivotal stakeholders in the strategic decision-making processes of SDFs, offering expert guidance on matters pertaining to data protection and privacy compliance. Nonetheless, the GDPR requires a DPO to operate independently, however, the DPO under the Act shall represent the SDF, be responsible to the Board of Directors or similar governing body of the SDF in India and be the point of contact for the grievance redressal mechanism under the provisions of this Act. By leveraging their specialized expertise, DPOs can proactively identify and mitigate risks, thereby safeguarding the interests of Data Principals and upholding the overarching objectives of the Act.

Furthermore, the delineation of DPO responsibilities extends beyond mere regulatory compliance, encompassing a broader mandate to instil a culture of accountability and transparency within SDFs. This entails the formulation and implementation of robust internal controls and audit mechanisms, facilitating continuous improvement and adaptation to evolving regulatory exigencies. In essence, DPOs occupy a central position within the organizational hierarchy of SDFs, embodying the ethos of data stewardship and championing the principles of privacy by design and default.

The formulation and enactment of regulatory guidelines pertaining to SDFs under the Digital Personal Data Protection Act, 2023, are essential imperatives in fortifying the overarching data protection architecture. These regulatory frameworks serve as bulwarks against potential breaches and lapses in data stewardship, while concurrently fostering a culture of transparency and accountability within the data ecosystem. By delineating clear and enforceable standards, the Rules seek to address prevailing regulatory ambiguities, thereby engendering confidence among stakeholders and instilling a sense of regulatory certainty in an era characterized by escalating data reliance. It is incumbent upon stakeholders to remain vigilant and proactive in navigating the evolving regulatory landscape, characterized by continual refinements and amendments. By staying abreast of forthcoming regulatory developments, stakeholders can position themselves strategically to anticipate and adapt to emergent compliance requirements, thereby mitigating the risk of non-compliance and safeguarding the integrity and privacy of personal data. Moreover, proactive engagement with regulatory authorities enables stakeholders to contribute constructively to the regulatory discourse, thereby influencing the formulation of regulatory frameworks conducive to their operational imperatives.

Conclusion

The imperative for proactive adaptation extends beyond mere regulatory compliance, encompassing a broader commitment to fostering a culture of data stewardship and ethical data handling practices. Through continuous investment in robust data governance frameworks and employee training initiatives, stakeholders can cultivate a climate of data responsibility, wherein the principles of privacy and integrity permeate every facet of organizational operations. By championing the principles of privacy by design and default, stakeholders can not only enhance their regulatory compliance posture but also reinforce their commitment to ethical data stewardship and customer trust. By embracing these regulatory imperatives and proactively adapting to evolving compliance requirements, stakeholders can navigate the complexities of an increasingly data-centric ecosystem while safeguarding the integrity and privacy of personal data.

Image Credits:

Photo by Just_Super on Canva

The Act confers augmented obligations upon entities designated as SDFs, a classification contingent upon an array of discerning factors. These factors encompass the scale and sensitivity of personal data under their custodianship, the prospective risks posed to the rights of Data Principals, and the broader implications on critical domains such as national sovereignty, electoral integrity, security, and public order. In furtherance of this regulatory imperative, the government, via formal notification, is empowered to define the criteria governing the classification of entities as SDFs. It is envisaged that such criteria may encompass quantitative benchmarks, potentially incorporating thresholds based on user volume, among other pertinent considerations, thereby ensuring a nuanced and contextually relevant determination of SDF status.

Related Posts

POST A COMMENT

Changes Brought Forth by the Bharatiya Nyaya Sanhita, 2023

The Bhartiya Nyaya Sanhita, 2023 (hereinafter referred to as the “BNS”) is a criminal legislation which seeks to replace the erstwhile Indian Penal Code, 1860 (hereinafter referred to as the “IPC”). A lot of significant changes can be observed in the BNS, such as the introduction of community service as a punishment, the grouping of inchoate offences under the same chapter, among others. This article seeks to present a comparative analysis of these changes, highlighting the key differences and their potential impact on our criminal justice system.

Addition and Alteration of Certain Language and Provisions

 
Commission of Offences through Electronic Means

According to individual statistical reports[1], India has reportedly been home to approximately 750 million internet users and 460 million users of various platforms of social media, which equates to roughly 30% of the total users in the world. Further, according to recent independent studies[2], smartphone users in India were approximately 650 million strong. These and other studies on the subject make it obvious that a substantial portion of the Indian population interacts, transacts and operates through digital mediums. Naturally, incidents of criminal activity have risen. In fact, according to Crime in India 2022[3], a publication of the National Crime Records Bureau, there has been an increase of 24.4% in the registration of cases under Cybercrime as compared to 2021.

For this very purpose, a new addition in the form of Section 2(39) of the BNS clearly states that all words or expressions with regards to technology and digital media in general, shall have the same meanings as those given in the Information Technology Act, 2002, as well as the Bhartiya Nagarik Suraksha Sanhita, 2023. This will enable a much wider scope in terms of recognising various acts that fall under the ambit of an offence, thereby contributing to the detection and deterrence of crime. Section 2(8) of the BNS states that documents now include electronic and digital records.

Community Service as a Punishment

As a new addition to the chapter on punishments, community service has been added as one of the punishments that may be given upon the conviction of an individual. It must also be noted that community service as a punishment, according to the Statement of Object and Reasons, is only for petty offences, and is therefore given in the BNS only under six offences as a means of punishment.

Furthermore, a report of the Standing Committee[4] further recommended the insertion of a proper definition of community service as well as contouring the scope of this punishment to the Parliament. However, this hasn’t been incorporated into the text of the Act as of now, with the laws being officially enforced[5]. The lack of proper clarity with regards to community service could result in massive judicial involvement in aiding the interpretation and setting of the law.

Use of Inclusive Language

As a first, the BNS uses the term transgender under Section 2(10), under the definition of “gender”, which was absent in the IPC. In general, various provisions have been made gender neutral, such as the offence of voyeurism, having been defined and punished under Section 77 of the BNS. However, it must be noted that Section 77, along with other provisions, have incorporated the gender neutrality of the perpetrator, and not the victim. Therefore, for example, even though a woman may now be convicted for the offence of voyeurism, a man will never be able to complain about voyeuristic behaviour, an area where the BNS could’ve legislated upon.

Similarly, a lot of offences, such as rape, have still been gendered, wherein only a woman can be a victim. This excludes transgenders from availing themselves of protection under various sexual offences, leaving their inclusion under Section 2(10) superficial.

However, it cannot be said that gender neutrality in the context of victims was not taken into consideration at all since, under Section 96, the BNS uses the word child, replacing the words minor girls in the erstwhile Section 366A of the IPC.

Snatching as a Separate Offence

Section 304 of the BNS provides, for the first time, snatching as an offence distinct from theft. Independent reports suggest that snatching is a high-frequency crime, reportedly[6] being conducted more than 5000 times per day in Delhi alone. It is not only based on frequency, but it also delineates from regular theft in many ways, which justifies its separation. Snatching is a subset of theft wherein movable property is taken by force or quickness of action from a person. Unlike theft, where the accused may employ deceitful means and take away property even without the knowledge of the person who owns it, snatching always involves the victim taking cognizance of the action at the time of commission itself, and it may even be accompanied with hurt or violence in order to give effect to the snatching. The maximum punishment for snatching has also been set at three years instead of seven years for theft.

Provision Related to Mob Lynching

India has witnessed various cases[7] of deaths caused by groups of people motivated by religion and caste, among other factors. Specific data related to mob lynchings in particular is difficult to obtain, primarily because the National Crime Records Bureau does not maintain any, combined with the fact that police and public order are State subjects, for which no centralised data is available[8].

However, through an amendment adding to the provision of murder under Section 103 of the BNS, any murder committed by a group of five or more people, specifically based on conditions like religion, caste or community, place of birth, personal belief, etc., is now distinctly punishable with death or life imprisonment with a fine, just like how a murder is punished. This is a breakthrough addition to the BNS in light of the incidents of lynching that have been surfacing over the years and is expected to act as a potent deterrent against any such incidents in the future. 

Grievous hurt caused by a mob of five or more people has also been punished separately under the provision of Section 117(4) of the BNS, solidifying the resolve against mob justice.

Removal of Certain Language and Provisions

Removal of Adultery

In conformity with a seminal decision[9] of the Hon’ble Supreme Court of India, which decriminalised the offence of adultery as given under Section 497 of the IPC, the BNS completely removed the provision. This judgment was based on the Hon’ble Supreme Court’s observation that the continuation of adultery as a crime is a direct interference with the personal lives of individuals. The organs of the government must distance themselves from how individuals make personal choices, according to the opinion of the Hon’ble Supreme Court.

Various opinions suggest that adultery should be reintroduced in the BNS as an offence and should be gender neutral in nature. To the contrary, the dissenting opinion suggests that it is a rather outdated position to consider marriage to be sacred and should only be considered as a contract between individuals, which, if broken, gives rise to civil remedies.

Non-Reproduction of Section 377 of the IPC

In 2018, a landmark judgment[10] of the Hon’ble Supreme Court of India struck down the provision of Section 377, which punished acts of consensual sexual intercourse between adults. The Hon’ble Court considered that the provision in question was a grave violation of Article 19(1)(a) of the Constitution[11], which guarantees all citizens a fundamental right to freedom of expression[12]. However, the remainder of the provision was kept in force, pertaining to bestiality, sodomy, etc., as they are separate offences within the same section, having no link with the sub-section in contention.

However, the BNS has completely removed all the provisions of Section 377 of the IPC, even the ones that have not been expressly declared to be unconstitutional, as discussed above.

Removal of Sedition

One of the most significant changes in the BNS is the removal of the colonial law of sedition, as was enshrined under Section 124A of the IPC. However, it must be noted that Section 152 of the BNS retains the essence of Section 124A, wording it in a manner that has been described as vague in itself[13]. This removal comes after the Law Commission, in its 2023 Report[14] believed sedition, subject to certain amendments based on a landmark 1962 case law[15], should be retained in Indian criminology. The phrases subversive activities and endangers sovereignty in Section 152 of the BNS have not been specifically defined, which may render the application of this Section highly problematic, wherein an individual may be arrested or investigated based on a misinterpretation of the BNS, which will only be rectified by the judiciary through a case before it. This, therefore, has a lot of potential to curtail the liberties of vast multitudes of people- before the new law actually has well defined limits supported by judicial decisions.

Other Relevant Additions and Alterations

Organised crime has been defined under Section 111 of the BNS, which includes certain recognised offences such as kidnapping, land grabbing, etc., among others, committed as a part of a syndicate, or on behalf of one.

Various definitions have been altered to clarify certain intentions, such as in Section 43 of the BNS,  the word night given under Section 103 of the IPC has been replaced by the words after sunset and before sunrise. Further, under Section 41, fire has been expanded to include mischief by fire or any explosive substance.

All inchoate offences, namely conspiracy, attempt, and abetment, have been incorporated under the same chapter. Under the IPC, they were given in various sections present in different Chapters of the Code.

Section 69 of the BNS is a relevant addition as it introduces an offence that was not present in the IPC. The offence of practicing deceit in order to effect sexual intercourse not amounting to rape has been considered a punishable offence under Section 69. Here, deceitful means are inclusive of false promises and inducements.

The provision of Section 376DA of the IPC that dealt with gang rape has been expanded and incorporated in the BNS in the form of Section 70(2), wherein a major change is the alteration of the words from under the age of sixteen to under the age of eighteen, thereby expanding the scope of the offence by bringing more cases under its purview.

While punishments for various offenses have been significantly increased, one of the most notable changes is the enhancement of the punishment for causing death by a rash or negligent act. Previously covered under Section 304A IPC with a maximum sentence of two years, this offense now carries a penalty of up to five years under Section 106(1) of the BNS.

Section 113 of the BNS covers terrorist acts, which are a new addition to the purview. Mostly inspired by the provisions of the Unlawful Activities (Prevention) Act, 1967 (hereinafter referred to as the “UAPA”), Section 113 introduces fines, the limits of which are specifically mentioned, across various sub-sections, which are absent under the scheme of the UAPA.

As a step towards curbing the spread of misinformation, the BNS also includes Section 353, which renders the making, publishing or circulating of false information backed with dishonest intention a punishable offence. Such a provision was not explicitly mentioned in the IPC, and it supplements the functioning of other laws dedicated to the same goal.

Under Section 337 of the BNS, which has incorporated the erstwhile offence of forgery of a document as given under Section 446 of the IPC, now the forgery of Government issued documents, such as the Aadhar Card, or the Voter Identity Card is also in the ambit, thereby expanding the scope of the offence.

Mischief as an offence has been given specific pecuniary limits[16] in sub-sections (4) and (5) of Section 324 of the BNS, wherein the amount of imprisonment increases as the value of the property destroyed or converted increases.

Section 309 of the IPC, which had become redundant due to Section 115 of the Mental Healthcare Act, 2017, where a person attempting suicide was presumed to have done so under extreme stress and was thus exempt from prosecution under Section 309 of the IPC, has been partially revived by the BNS under Section 226. However, only cases where a person commits suicide with the proven intention of compelling or restraining any public servant from performing their duties are covered.

The offence of kidnapping as envisaged in Section 137 of the BNS has removed the distinction between the age of minor boys and girls for the purposes of kidnapping and now includes the words ‘any child’ which has been defined under 2(3) to mean ‘any person below the age of eighteen years.’ This has brought the kidnapping of boys aged between sixteen and eighteen into the ambit of the offence of kidnapping, which had been absent under Section 361 of the IPC.

Conclusion

The introduction of the BNS, for the most part, is a positive decision to reinvent the IPC in a manner that fits the current social climate. It has made various significant changes, removing laws that have colonial roots, which is archaic, and also certain provisions that hold no credible ground in today’s legal scenario. It rightfully promotes principles like gender neutrality; however, it does seem to fall short of properly incorporating them. The BNS has not acted upon various calls for decriminalisation of offences, particularly those made by the Committee on Draft National Policy on Criminal Justice[17]. After its commencement and after the creation of new questions of law based on its revised provisions, the citizenry will be able to identify its impact in a better manner.

Here is a color coded table of the changes made:

References:

[1] Simon Kemp, Digital 2024: India, DATAREPORTAL (Jun. 03, 2024, 03:24 PM), https://datareportal.com/reports/digital-2024-india#:~:text=The%20state%20of%20digital%20in%20India%20in%202024&text=India%20was%20home%20to%20462.0,percent%20of%20the%20total%20population.

[2] Josh Howarth, How Many People Own Smartphones? (2024-2029). EXPLODING TOPICS (Jun. 03, 2024, 03:26 PM), https://explodingtopics.com/blog/smartphone-stats.

[3] NATIONAL CRIME RECORDS BUREAU, https://ncrb.gov.in/uploads/nationalcrimerecordsbureau/custom/1701607577CrimeinIndia2022Book1.pdf last visited (Jun. 03, 2024).

[4] SANSAD, https://sansad.in/getFile/rsnew/Committee_site/Committee_File/ReportFile/15/188/246_2023_11_16.pdf?source=rajyasabha last visited (Jun. 03, 2024).

[5] THE HINDU, https://www.thehindu.com/news/national/three-newly-enacted-criminal-laws-to-come-into-effect-from-july-1/article67881602.ece last visited (Jun. 03, 2024).

[6] DELHI POLICE, https://delhipolice.gov.in/Images/HTMLfiles/Crime%20In%20Delhi(2).pdf last visited (03. Jun, 2024).

[7] CITIZENS FOR JUSTICE AND PEACE, https://cjp.org.in/mob-lynching-three-separate-incidents-surface-even-minors-and-partially-disabled-muslims-not-safe/ last visited (Jun. 03, 2024). 

[8] SANSAD, https://sansad.in/getFile/annex/258/AU55.pdf?source=pqars last visited (Jun. 03, 2024).

[9] Joseph Shine v. Union of India, (2018) 2 SCC 189.

[10] Navtej Singh Johar & Ors. v. Union of India, Ministry of Law and Justice, (2018) 1 SCC 791.

[11] INDIA CONST. art. 19(1)(a).

[12] SUPREME COURT OBSERVER, https://www.scobserver.in/cases/navtej-singh-johar-v-union-of-india-constitutionality-of-section-377-ipc-background/ last visited (Jun. 03, 2024).

[13] PROJECT 39A, https://p39ablog.com/2023/09/criminal-law-bills-2023-decoded-8-sedition-recast-implications-of-Section-150-of-the-bns-2023/ last visited (Jun. 03, 2024).

[14] LAW COMMISSION OF INDIA, https://cdnbbsr.s3waas.gov.in/s3ca0daec69b5adc880fb464895726dbdf/uploads/2023/06/2023060150.pdf last visited (Jun. 03, 2024).

[15] Kedar Nath Singh v. State of Bihar, 1962 SCC OnLine SC 6.

[16] NATIONAL LAW SCHOOL OF INDIA UNIVERSITY, https://www.nls.ac.in/wp-content/uploads/2023/12/IPC-BNS_Table.pdf last visited (Jun. 04, 2024).

[17] MINISTRY OF HOME AFFAIRS, https://www.mha.gov.in/sites/default/files/2022-09/DraftPolicyPaperAug_4[1].pdf last visited (Jun. 03, 2024

Image Credits:

Photo by maxkabakov on Canva

The introduction of the BNS, for the most part, is a positive decision to reinvent the IPC in a manner that fits the current social climate. It has made various significant changes, removing laws that have colonial roots, which is archaic, and also certain provisions that hold no credible ground in today’s legal scenario. 

Related Posts

POST A COMMENT

Karnataka's IT Exemption: Tech Boom at Employees' Expense?

In a significant move that has garnered attention across the business and legal landscapes, the Karnataka government, vide Notification no. LD 328 LET 2023, dated June 10, 2024, exempted IT and IT-enabled services industries from the applicability of the Industrial Employment (Standing Orders) Act, 1946, (‘Act’) for a further period of five years. This notification also applies to startups, animation, gaming, computer graphics, telecom, business process outsourcing (BPO), knowledge process outsourcing (KPO), and other knowledge-based industries.

The said Act requires employers in industrial establishments to define conditions of employment in the form of Standing Orders and make them known to the workmen. It provides for the certification of draft Standing Orders as submitted by employers. Such Standing Orders have to cover the aspects specified in the Schedule to the Act which include classification of workmen, manner of intimation of working hours, holidays, paydays, wage rates, employment termination, shift working, etc.

An exemption of this nature was first granted in the year 1999 and it has been renewed multiple times since then. This was done recognising the IT and IT-enabled sector’s pivotal role and to encourage innovation, enhance ease of doing business, and attract foreign investment. The last extension, accorded vide Notification no. LD 194 LET 2016, dated May 25, 2019, ended last month.

As per the present Notification, the exemption is subject to the following conditions:

  • Internal Committee under POSH Act

The establishments have to constitute an Internal Committee as per the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, and the rules framed thereunder.

  • Setting up of Grievance Redressal Committee

A Grievance Redressal Committee has to be set up, consisting of an equal number of persons representing employer and employees, to address any complaint or grievances of the employees. This Committee should handle all types of complaints and grievances within a reasonable period.

  • Intimation regarding Disciplinary Actions

Information regarding cases of disciplinary action such as suspension, discharge, termination, demotion, dismissal, etc. of employees has to be intimated to the Jurisdictional Deputy Labour Commissioner and Commissioner of Labour in Karnataka.

  • Furnishing Information sought on Service Conditions

Employers are required to promptly submit any information concerning service conditions of employees as sought by the Jurisdictional Deputy Labour Commissioner and Commissioner of Labour in Karnataka.

Position after Labour Code Comes into Effect

When it comes to the new labour codes, which are expected to be implemented shortly, the Industrial Relations Code, 2020, (’Code’) contains provisions pertaining to Standing Orders and is set to replace the Industrial Employment (Standing Orders) Act, 1946 (i.e., apart from the Trade Unions Act, 1926, and the Industrial Disputes Act, 1947). It is clarified, under the present Notification, that once this Code is implemented, the Code will apply to all.

Remarks

This Notification is intended to provide a stable regulatory environment that can help IT firms focus on growth and technological advancement. It seems like the decision aims to encourage growth and maintain the state’s preeminence as a global IT hub. Due to the exemption, IT companies and startups can continue having flexible working hours considering remote working and non-standard schedules which are common in this sector.  This sector can also resolve labour disputes internally instead of having to adhere to conventional dispute mechanisms.

The extension is widely seen as a boon by many tech firms considering that their growth trajectory remains undisturbed. However, its implication for labour rights cannot be ignored and critics may argue that the exemption undermines workers’ rights. One of the questions that may arise is – do the benefits justify the renewal of the same four conditions for over a decade without prescribing any additional requirements. In fact, concerns have been raised regarding compliance with the specified conditions particularly the one requiring filing information on disciplinary actions taken against employees.

Evidently, the decision to extend the exemption has been taken despite protests held by the Karnataka State IT/ITES Employees Union (KITU) earlier this year. Reportedly, the KITU has also filed a writ petition before the Karnataka High Court contesting the exemption.

In light of the above, the challenge moving forward would be that of creating a balance between the economic growth of the state without leaving the employees vulnerable.

Hope that the state government stands true to its motive of not only boosting these sectors but also safeguarding employees’ interests and creating more jobs thereby enabling the economy to bloom.

Image Credits:

Photo by itasun on Canva

The Act requires employers in industrial establishments to define conditions of employment in the form of Standing Orders and make them known to the workmen. It provides for the certification of draft Standing Orders as submitted by employers. Such Standing Orders have to cover the aspects specified in the Schedule to the Act which include classification of workmen, manner of intimation of working hours, holidays, paydays, wage rates, employment termination, shift working, etc.

Related Posts

POST A COMMENT