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Key Compliances under Information Technology (IT) Act, 2000

Background

The Information Technology Act, 2000 was enacted by the Government of India to grant legal recognition to electronic records, digital signatures, and online transactions in order to facilitate e-commerce and digital governance. It emerged from the need to align with global practices such as the UNCITRAL Model Law on Electronic Commerce and to support India’s growing digital economy. The Act established legal provisions for electronic contracts, cybersecurity practices, and the admissibility of electronic evidence in courts. It also introduced penalties and adjudication mechanisms for cybercrimes including hacking, data theft, and unauthorized access. Overall, the IT Act, 2000 laid the foundational legal framework for India’s digital transformation and continues to be supplemented through amendments and rules to address evolving technological challenges.

Applicability

Applies to any person or body corporate required by law to maintain records or documents.
Applies to any originator or their authorized agent who creates or sends an e-record.
Applies to any e-record whose integrity and authenticity are ensured by security measures.
Applies to any e-signature created securely, ensuring authenticity and integrity of the record
Applies if law mandates keeping source code and someone knowingly hides, alters, or destroys it.
Any unauthorized person or person in charge of Computer, system, network, resource

Compliance Requirements under Information Technology Act, 2000

Retention of records in E-form (Section 7)

If a law requires documents or records to be retained for a specific period, the requirement is met when they are kept in electronic form, provided the information remains accessible for future reference, the record is preserved in its original or an accurately reproducible format, and it includes details identifying the origin, destination, date, and time of sending or receiving. This does not apply to data generated automatically only to enable electronic transmission. This section also does not apply where a law specifically requires records to be retained as electronic records.

Attribution of the electronic records to the originator (Section 11)

An electronic record shall be attributed to the originator—

(a) if it was sent by the originator himself;

(b) by a person who had the authority to act on behalf of the originator in respect of that electronic record; or

Secure Electronic Records Using Security Procedures (Section 14)

An electronic record becomes a secure electronic record from the moment a security procedure is applied to it and remains so until it is verified.

Where any security procedure has been applied to an electronic record at a specific point of time, then such record shall he deemed to be a secure electronic record from such point of time to the time of verification.

Secure Electronic Signature Using Approved Security Procedure (Section 15)

An electronic signature shall be deemed to be a secure electronic signature if—

(i) the signature creation data, at the time of affixing signature, was under the exclusive control of signatory and no other person; and

(ii) the signature creation data was stored and affixed in such exclusive manner as may be prescribed.

Explanation.– In case of digital signature, the ―signature creation data‖ means the private key of the subscriber.

Prohibition on tampering with computer source documents (Section 65)

No person shall knowingly or intentionally conceal, destroy or alter or intentionally or knowingly cause another to conceal, destroy, or alter any computer source code used for a computer, computer programme, computer system or computer network, when the computer source code is required to be kept or maintained by law for the time being in force

Explanation.–For the purposes of this section, ―computer source code‖ means the listing of programmes, computer commands, design and layout and programme analysis of computer resource in any form.

Prohibition on commission of any acts causing damage to computer, computer system etc (Section 43)

Any person who, without permission of the owner or person in charge of a computer, computer system, computer network or computer resource:

(a) accesses or secures access to it;

(b) downloads, copies, or extracts any data, database, or information, including that stored in removable media;

(d) damages any computer, system, network, data, database, or programs;

(e) disrupts any computer, system, or network;

(f) denies access to any authorised person;

(g) assists anyone in gaining unauthorised access in violation of this Act or its rules;

(h) charges services used by one person to another’s account by tampering with any computer, system, or network;

(i) destroys, deletes, or alters information in a computer resource or diminishes its value or utility; or

(j) steals, conceals, destroys, or alters computer source code with intent to cause damage, shall be liable to pay damages by way of compensation to the affected person.

Penalty & Punishment

Section 43A. Compensation for failure to protect data.–Where a body corporate, possessing, dealing or handling any sensitive personal data or information in a computer resource which it owns, controls or operates, is negligent in implementing and maintaining reasonable security practices and procedures and thereby causes wrongful loss or wrongful gain to any person, such body corporate shall be liable to pay damages by way of compensation to the person so affected.
Whoever knowingly or intentionally conceals, destroys or alters or intentionally or knowingly causes another to conceal, destroy, or alter any computer source code used for a computer, computer programme, computer system or computer network, when the computer source code is required to be kept or maintained by law for the time being in force, shall be punishable with imprisonment up to three years, or with fine which may extend up to two lakh rupees, or with both
U/s 66. Computer related offences.–If any person, dishonestly or fraudulently, does any act referred to in section 43, he shall be punishable with imprisonment for a term which may extend to three years or with fine which may extend to five lakh rupees or with both. Secure electronic records are records created, transmitted, or stored using security procedures to ensure integrity and authenticity.
Sec 11 simply determines who the electronic record is legally considered to be from (the originator or their authorized agent).
Penalties arise only if misuse, tampering, or fraud occurs, for example:

- Fraudulent use of electronic signature → Sec 66D → Imprisonment up to 3 years and/or fine up to ₹1 lakh.

- Tampering with electronic records or signatures → Sec 65 → Imprisonment up to 3 years and/or fine up to ₹2 lakh.

- Negligence causing wrongful loss → Sec 43A → Compensation to affected person.

Also there is U/s 45. Residuary penalty.–Whoever contravenes any rules or regulations made under this Act, for the contravention of which no penalty has been separately provided, shall be liable to pay a compensation not exceeding twenty-five thousand rupees to the person affected by such contravention or a penalty not exceeding twenty-five thousand rupees

Disclaimer: The information contained in this Article is intended solely for personal non-commercial use of the user who accepts full responsibility of its use. The information in the article is general in nature and should not be considered to be legal, tax, accounting, consulting or any other professional advice. We make no representation or warranty of any kind, express or implied regarding the accuracy, adequacy, reliability or completeness of any information on our page/article.

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