Governance, Ethics, Law and International Relations — Group-I · Chapter 11

Labour, Cyber and Tax Laws

What to remember

Labour is in the Concurrent List, so both Parliament and states make labour laws. In 2019-2020 Parliament merged many old laws into four Labour Codes: Wages, Industrial Relations, Social Security, and Occupational Safety, Health and Working Conditions.
The Information Technology Act, 2000 is India's main cyber law. It gives legal recognition to electronic records and digital signatures and punishes cyber offences.
GST is an indirect tax on supply of goods and services, introduced by the 101st Constitutional Amendment. Income tax is the main direct tax, charged under the Income-tax Act, 2025 (in force from 1 April 2026, replacing the Income-tax Act, 1961).

1. Labour laws: constitutional basis

Articles 14, 16, 19(1)(c), 21, 23 and 24 protect workers' basic rights. Article 19(1)(c) gives the right to form associations or unions. Article 23 bans forced labour. Article 24 bans child employment in hazardous work.
Directive Principles in Articles 38, 39, 41, 42, 43 and 43A cover a living wage, humane working conditions, equal pay for equal work, maternity relief and worker participation in management.
"Trade unions" and "industrial and labour disputes" are in the Concurrent List.

2. The four Labour Codes

Parliament passed these codes to merge and simplify older central laws. Check the latest official release for their present status of implementation.

Code	What it covers	Laws it subsumes (examples)
Code on Wages, 2019	Minimum wages, timely payment, bonus, equal remuneration	Minimum Wages Act, Payment of Wages Act, Payment of Bonus Act, Equal Remuneration Act
Industrial Relations Code, 2020	Trade unions, standing orders, strikes, layoffs, retrenchment, dispute settlement	Industrial Disputes Act, Trade Unions Act, Industrial Employment (Standing Orders) Act
Code on Social Security, 2020	Provident fund, insurance, gratuity, maternity benefit, gig and platform workers	EPF Act, ESI Act, Maternity Benefit Act, Gratuity Act
Occupational Safety, Health and Working Conditions Code, 2020	Safety, health, hours of work, women's night work with consent, contract labour	Factories Act, Contract Labour Act, Mines Act

Other well-known labour laws and ideas:

Industrial dispute: a dispute between employer and workmen, settled through conciliation, arbitration or adjudication by labour courts and tribunals.
Collective bargaining: negotiation between employer and union on wages and conditions.
Minimum wage: the lowest wage that must be paid by law. Living wage: a higher wage that gives a decent life.
Child and Adolescent Labour (Prohibition and Regulation) Act, 1986 as amended: prohibits child labour below fourteen and bans adolescents in hazardous work.
Bonded Labour System (Abolition) Act, 1976: abolished bonded labour.
Equal Remuneration: equal pay for equal work irrespective of gender.
Maternity Benefit Act, 1961 as amended: paid maternity leave for women workers.
Unorganised Workers' Social Security Act, 2008: welfare schemes for unorganised workers.
MGNREGA, 2005: gave a statutory right to 100 days of wage employment in rural areas; it is replaced by the Viksit Bharat - Guarantee for Rozgar and Ajeevika Mission (Gramin) Act, 2025 (VB-G RAM G), guaranteeing 125 days, from 1 July 2026.
Employees' Provident Fund Organisation and Employees' State Insurance Corporation: the main social security bodies.
e-Shram: national portal to register unorganised workers.

3. Cyber law: the IT Act, 2000

The IT Act was based on the UNCITRAL Model Law on Electronic Commerce.

Main features:

Legal recognition of electronic records and electronic (digital) signatures.
Regulation of Certifying Authorities, headed by the Controller of Certifying Authorities.
Adjudication and appellate bodies for civil wrongs; offences are tried in criminal courts.
Section 43 deals with unauthorised access and damage to computers, with compensation.
Section 66 deals with computer-related offences such as hacking done with dishonest intention.
Section 66C punishes identity theft, and Section 66D punishes cheating by personation using a computer.
Section 66E punishes violation of privacy by capturing private images.
Section 66F deals with cyber terrorism.
Sections 67, 67A and 67B punish publishing obscene material, sexually explicit material and child sexual abuse material.
Section 69 allows lawful interception and monitoring under conditions.
Section 69A allows blocking of public access to information.
Section 79 gives conditional protection to intermediaries (safe harbour).
Section 66A, which punished offensive messages, was struck down in 2015 in the Shreya Singhal case as violating free speech.

Related ideas:

CERT-In: the national agency for responding to cyber security incidents.
Digital Personal Data Protection Act, 2023: gives rights to individuals over their personal data and duties to data fiduciaries. Check the latest official release for rules and implementation.
Right to privacy: declared a fundamental right under Article 21 in the Puttaswamy case of 2017.
Types of cyber crime: phishing, ransomware, identity theft, online financial fraud, cyber stalking, deepfakes, malware.
National Cyber Crime Reporting Portal and helpline 1930 support victims of financial cyber fraud.

4. Tax laws: basic structure

Taxes are divided into direct and indirect.

Point	Direct tax	Indirect tax
Burden	Falls on the person who pays	Can be passed on to the consumer
Examples	Income tax, corporate tax	GST, customs duty, excise on specified goods
Nature	Progressive in design	Regressive in effect
Evasion	Easier to evade (income can be concealed)	Harder to evade (collected at the point of sale)

5. Direct taxes

Income tax is levied under the Income-tax Act, 2025 (in force from 1 April 2026; it replaced the Income-tax Act, 1961) on income of individuals, firms, companies and others. It is a central tax under Entry 82 of the Union List, with agricultural income excluded from the Union power and taxed by states.
Tax year: the Income-tax Act, 2025 replaced the old 'previous year' and 'assessment year' pair with a single 'tax year' (1 April to 31 March).
Heads of income: salary, house property, business or profession, capital gains and other sources.
Residential status decides the scope of taxable income.
PAN is a permanent account number issued by the Income Tax Department. TDS is tax deducted at source.
Corporate tax is charged on the income of companies.
Capital gains are profits from selling capital assets and can be short-term or long-term.
The Central Board of Direct Taxes (CBDT) is the policy body for direct taxes.
Surcharge and cess are additional levies on top of tax.
Wealth tax was abolished in 2015.

6. Goods and Services Tax (GST)

GST is a destination-based, multi-stage tax on supply of goods and services, with credit for tax paid on inputs. It replaced a number of central and state taxes such as excise duty on many goods, service tax and VAT.

It was introduced by the Constitution (101st Amendment) Act, 2016 and came into effect on 1 July 2017.
Article 246A gives both Parliament and states power to levy GST. Article 279A created the GST Council.
The GST Council is chaired by the Union Finance Minister, with the Union Minister of State for Finance and state finance ministers as members. It recommends rates, exemptions and rules.
CGST is levied by the Centre on intra-state supply. SGST is levied by the state on intra-state supply. IGST is levied by the Centre on inter-state supply and imports. In Union Territories without legislature, UTGST applies.
Input tax credit lets a taxpayer deduct tax paid on inputs from tax payable on output, preventing the cascading of taxes.
GSTIN is the registration number. The GST Network (GSTN) runs the common portal.
The compensation arrangement helped states for revenue loss in the early years. Check the latest official release for its present status.
Petroleum, alcohol for human consumption and some other items were kept outside the main GST structure at the start.

7. Other tax-related terms

Customs duty is levied on imports and exports.
Cess is a tax levied for a specific purpose.
Tax evasion is illegal; tax avoidance uses legal loopholes; tax planning is lawful use of available benefits.
Black money is income not declared to tax authorities.
Faceless assessment reduces direct contact between taxpayer and officer to curb corruption.

Exam traps

Labour in which list: Concurrent List, not Union only.
Article 23 vs Article 24: forced labour is Article 23; child work in hazardous industry is Article 24.
Section 66A vs 66F: 66A was struck down; 66F deals with cyber terrorism.
IT Act vs DPDP Act: the IT Act is cyber law in general; the DPDP Act is about personal data.
CGST/SGST vs IGST: the first two are intra-state; IGST is inter-state and on imports.
Direct vs indirect tax: income tax is direct; GST is indirect.
Article 246A vs Article 279A: 246A gives power to tax; 279A set up the GST Council.
Minimum wage vs living wage: minimum is legal floor; living wage gives a decent standard.

One-liners

Labour is a Concurrent List subject.
Four Labour Codes cover wages, industrial relations, social security and safety.
The IT Act came in 2000.
Section 66A of the IT Act was struck down in 2015.
Right to privacy is part of Article 21, as held in 2017.
CERT-In handles national cyber incidents.
The Digital Personal Data Protection Act was passed in 2023.
Income tax is levied under the Income-tax Act, 2025 (from 1 April 2026; it replaced the 1961 Act).
GST began on 1 July 2017 through the 101st Amendment.
The GST Council is set up under Article 279A.
Input tax credit prevents cascading of taxes.
IGST is levied on inter-state supply and imports.

Practice questions

Labour is a subject in the
1. Concurrent List
2. Union List only
3. State List only
4. Residuary list
Answer
A. Concurrent List
Trade unions and industrial disputes are in the Concurrent List.
Which Article of the Constitution prohibits forced labour?
1. Article 19
2. Article 21
3. Article 24
4. Article 23
Answer
D. Article 23
Article 23 bans traffic in human beings and forced labour.
Which Article bans employment of children in hazardous work?
1. Article 25
2. Article 16
3. Article 24
4. Article 23
Answer
C. Article 24
Article 24 prohibits child employment in factories, mines and hazardous work.
The right to form associations or unions is under
1. Article 21A
2. Article 19(1)(c)
3. Article 32
4. Article 14
Answer
B. Article 19(1)(c)
Article 19(1)(c) gives the right to form associations or unions.
How many Labour Codes did Parliament pass in 2019-2020?
1. Four
2. Three
3. Two
4. Six
Answer
A. Four
The four codes cover wages, industrial relations, social security and safety.
Which Labour Code covers provident fund, gratuity and maternity benefit?
1. Occupational Safety Code
2. Industrial Relations Code
3. Code on Wages
4. Code on Social Security
Answer
D. Code on Social Security
Social security benefits are merged into the Code on Social Security.
The main cyber law of India is the
1. Copyright Act, 1957
2. Right to Information Act
3. Information Technology Act, 2000
4. Indian Telegraph Act
Answer
C. Information Technology Act, 2000
The IT Act, 2000 gives legal recognition to electronic records and digital signatures.
Which section of the IT Act was struck down in 2015?
1. Section 66A
2. Section 66F
3. Section 69A
4. Section 43
Answer
A. Section 66A
Section 66A was struck down in the Shreya Singhal case.
The national agency for cyber security incident response is
1. GSTN
2. CBDT
3. SEBI
4. CERT-In
Answer
D. CERT-In
CERT-In is the Indian Computer Emergency Response Team.
GST came into effect on
1. 1 January 2020
2. 1 July 2017
3. 1 April 2015
4. 26 January 2010
Answer
B. 1 July 2017
GST was launched on 1 July 2017.
The Constitutional Amendment that introduced GST is the
1. 44th Amendment
2. 42nd Amendment
3. 73rd Amendment
4. 101st Amendment
Answer
D. 101st Amendment
The Constitution (101st Amendment) Act, 2016 introduced GST.
The GST Council is set up under
1. Article 279A
2. Article 246A
3. Article 280
4. Article 265
Answer
A. Article 279A
Article 279A provides for the GST Council.
Which tax is levied on inter-state supply of goods and services?
1. IGST
2. CGST
3. SGST
4. Customs duty only
Answer
A. IGST
IGST is levied by the Centre on inter-state supply and imports.
Income tax is levied under the
1. Companies Act, 2013
2. Customs Act, 1962
3. Income-tax Act, 1961
4. GST Act, 2017
Answer
C. Income-tax Act, 1961
The Income-tax Act, 1961 governs income tax.
Which of the following is a direct tax?
1. GST
2. Customs duty
3. Income tax
4. Excise on petrol only
Answer
C. Income tax
A direct tax is borne by the person who pays it.
The Chairperson of the GST Council is the
1. Chief Justice
2. Union Finance Minister
3. Prime Minister
4. Comptroller and Auditor General
Answer
B. Union Finance Minister
The Union Finance Minister chairs the Council.
The Digital Personal Data Protection Act was passed in
1. 2008
2. 2000
3. 2015
4. 2023
Answer
D. 2023
The DPDP Act was enacted in 2023.
Input tax credit helps to
1. increase tax on tax
2. avoid the cascading of taxes
3. collect customs duty
4. exempt all goods
Answer
B. avoid the cascading of taxes
Credit for tax on inputs prevents tax on tax.
Right to privacy was declared a fundamental right under Article 21 in the
1. Maneka Gandhi case
2. Shreya Singhal case
3. Kesavananda Bharati case
4. Puttaswamy case
Answer
D. Puttaswamy case
The Puttaswamy judgment of 2017 recognised privacy as a fundamental right.
Which IT Act section deals with identity theft?
1. Section 69A
2. Section 66C
3. Section 66F
4. Section 79
Answer
B. Section 66C
Section 66C punishes identity theft.
Which IT Act provision gives conditional protection to intermediaries?
1. Section 43
2. Section 67
3. Section 79
4. Section 66E
Answer
C. Section 79
Section 79 provides safe harbour to intermediaries.
Which IT Act section deals with cyber terrorism?
1. Section 66F
2. Section 66D
3. Section 43
4. Section 66A
Answer
A. Section 66F
Section 66F punishes cyber terrorism.
The legislature which can levy GST under Article 246A is
1. Parliament only
2. State legislatures only
3. both Parliament and State legislatures
4. Panchayats
Answer
C. both Parliament and State legislatures
Article 246A gives concurrent power to levy GST.
Minimum wage differs from living wage because
1. both are the same
2. living wage is lower
3. minimum wage is paid only to women
4. minimum wage is the legal floor, while living wage gives a decent standard of life
Answer
D. minimum wage is the legal floor, while living wage gives a decent standard of life
A living wage is higher and gives a decent life.
Which law guarantees rural wage employment as a legal right?
1. Factories Act
2. MGNREGA, 2005
3. Contract Labour Act
4. Payment of Gratuity Act
Answer
B. MGNREGA, 2005
MGNREGA gives a statutory guarantee of wage employment.
Which Labour Code covers trade unions, strikes and layoffs?
1. Industrial Relations Code, 2020
2. Code on Social Security, 2020
3. Code on Wages, 2019
4. OSH Code, 2020
Answer
A. Industrial Relations Code, 2020
Industrial relations covers unions, strikes and retrenchment.
Which is an example of an indirect tax?
1. Corporate tax
2. GST
3. Capital gains tax
4. Income tax
Answer
B. GST
GST can be passed on to the consumer.
What does TDS stand for?
1. Tax on durable stock
2. Total direct sale
3. Transfer of deposit slip
4. Tax deducted at source
Answer
D. Tax deducted at source
TDS means tax deducted at the source of income.
Tax avoidance differs from tax evasion because avoidance
1. uses legal loopholes while evasion is illegal
2. is illegal while evasion is legal
3. is a form of customs duty
4. applies only to companies
Answer
A. uses legal loopholes while evasion is illegal
Evasion is illegal; avoidance uses legal means.
The body that gives policy guidance for direct taxes is the
1. Finance Commission
2. GST Council
3. Central Board of Direct Taxes
4. NITI Aayog
Answer
C. Central Board of Direct Taxes
The CBDT is the policy body for direct taxes.
Consider the statements. 1. GST is a destination-based tax. 2. GST replaced the Income-tax Act. Which is/are correct?
1. 1 only
2. 2 only
3. Both 1 and 2
4. Neither 1 nor 2
Answer
A. 1 only
GST replaced indirect taxes such as VAT and service tax, not income tax.
Consider the statements. 1. Section 66A of the IT Act is still in force. 2. Section 66A was struck down in 2015. Which is/are correct?
1. 1 only
2. 2 only
3. Both 1 and 2
4. Neither 1 nor 2
Answer
B. 2 only
The Supreme Court struck it down as violating free speech.
Consider the statements. 1. CGST is levied by the Centre on intra-state supply. 2. SGST is levied by states on intra-state supply. Which is/are correct?
1. 1 only
2. 2 only
3. Both 1 and 2
4. Neither 1 nor 2
Answer
C. Both 1 and 2
Both are correct.
Consider the statements. 1. Labour is in the Union List only. 2. States cannot make labour laws. Which is/are correct?
1. 1 only
2. 2 only
3. Both 1 and 2
4. Neither 1 nor 2
Answer
D. Neither 1 nor 2
Labour is a Concurrent List subject, so both Centre and states legislate.
Consider the statements. 1. The IT Act, 2000 recognises electronic signatures. 2. The IT Act, 2000 deals only with income tax. Which is/are correct?
1. 1 only
2. 2 only
3. Both 1 and 2
4. Neither 1 nor 2
Answer
A. 1 only
The IT Act deals with electronic records, signatures and cyber offences.
Consider the statements. 1. The GST Council recommends rates and exemptions. 2. The GST Council is chaired by the Prime Minister. Which is/are correct?
1. 1 only
2. 2 only
3. Both 1 and 2
4. Neither 1 nor 2
Answer
A. 1 only
The Council is chaired by the Union Finance Minister.
Consider the statements. 1. Article 24 prohibits child labour in hazardous employment. 2. Article 23 prohibits forced labour. Which is/are correct?
1. 1 only
2. 2 only
3. Both 1 and 2
4. Neither 1 nor 2
Answer
C. Both 1 and 2
Both are correct.
Consider the statements. 1. Income tax is a direct tax. 2. GST is a direct tax. Which is/are correct?
1. 1 only
2. 2 only
3. Both 1 and 2
4. Neither 1 nor 2
Answer
A. 1 only
GST is an indirect tax.
Consider the statements. 1. The right to privacy is a fundamental right. 2. The Puttaswamy judgment was delivered in 2017. Which is/are correct?
1. 1 only
2. 2 only
3. Both 1 and 2
4. Neither 1 nor 2
Answer
C. Both 1 and 2
Both are correct.
Consider the statements. 1. IGST is levied on imports. 2. IGST is levied only by states. Which is/are correct?
1. 1 only
2. 2 only
3. Both 1 and 2
4. Neither 1 nor 2
Answer
A. 1 only
IGST is levied by the Centre on inter-state supply and imports.
Match the section with the offence: Section 66E of the IT Act
1. Cyber terrorism
2. Identity theft
3. Cheating by personation
4. Violation of privacy by capturing private images
Answer
D. Violation of privacy by capturing private images
Section 66E punishes capturing and publishing private images.
Which of the following is a type of cyber crime?
1. Exchange rate
2. Phishing
3. Auditing
4. Barter
Answer
B. Phishing
Phishing is a fraud to steal sensitive data through fake messages.
The Controller of Certifying Authorities is linked with
1. GST returns
2. digital signatures
3. labour inspection
4. customs duty
Answer
B. digital signatures
CCA regulates Certifying Authorities issuing digital signature certificates.
Which is a feature of faceless assessment under direct tax administration?
1. Abolition of income tax
2. No return filing
3. Only physical hearings
4. Reduced direct contact between the taxpayer and the officer
Answer
D. Reduced direct contact between the taxpayer and the officer
Faceless assessment aims to curb corruption by limiting direct contact.
Which of the following is a social security body for workers in India?
1. CERT-In
2. Employees' Provident Fund Organisation
3. GST Network
4. Central Board of Direct Taxes
Answer
B. Employees' Provident Fund Organisation
EPFO administers the provident fund for employees.

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