This section bans every government employee from ever earning any side income, like rent from a house they own.

It only applies to 'trade' when a person is specifically and legally bound by their service rules not to engage in it — passive income like rent isn't automatically 'trade' under this section.

This is a brand-new crime introduced by the Bharatiya Nyaya Sanhita, 2023.

It continues the same offence that existed as Section 168 of the Indian Penal Code, 1860, just renumbered and rephrased under the new code.

Bharatiya Nyaya Sanhita, 2023

Section 202

Public servant unlawfully engaging in trade

Whoever, being a public servant, and being legally bound as such public servant not to engage in trade, engages in trade, shall be punished with simple imprisonment for a term which may extend to one year, or with fine, or with both or with community service.§

Why this exists

Government service rules (like the All India Services Conduct Rules) often stop public servants from running private businesses, so that their time, attention, and decisions aren't influenced by personal profit or conflicts of interest. Earlier, breaking such a rule was mainly a departmental matter. This provision, carried forward from Section 168 of the old Indian Penal Code, added a criminal penalty as extra backing for that rule, treating the breach as a punishable offence and not just a service violation.

Common misconceptions

Myth: This section bans every government employee from ever earning any side income, like rent from a house they own.
Fact: It only applies to 'trade' when a person is specifically and legally bound by their service rules not to engage in it — passive income like rent isn't automatically 'trade' under this section.
Myth: This is a brand-new crime introduced by the Bharatiya Nyaya Sanhita, 2023.
Fact: It continues the same offence that existed as Section 168 of the Indian Penal Code, 1860, just renumbered and rephrased under the new code.