Technical

PII Classification

Defined in §8(4), DPDPA 2023; Rule 6(1), Rules 2025

The systematic categorisation of personal data by sensitivity level to apply proportionate security controls.

What does “PII Classification” mean?

PII (Personally Identifiable Information) classification is the process of identifying, cataloguing, and categorising personal data elements by their sensitivity level. Classification tiers typically include: public, internal, confidential (personal), sensitive (financial/health), and restricted (special category/children). Each tier maps to specific security controls, access restrictions, encryption requirements, and retention policies. Under DPDPA, proportionate safeguards must match data sensitivity.

Why does this matter for your business?

Without proper classification, you either over-protect everything (expensive) or under-protect sensitive data (risky). Classification enables proportionate security spending and helps prioritise breach response based on affected data sensitivity.

Real example

A Bengaluru fintech classifies data into 4 tiers: Tier 1 (name, email — standard controls), Tier 2 (PAN, bank account — encrypted at rest), Tier 3 (income, credit score — encrypted + access-logged), Tier 4 (Aadhaar biometrics — HSM-stored, dual-approval access).

Common misconception

PII classification is not a one-time exercise. As you add new data fields, integrate new systems, or change processing activities, classifications must be reviewed and updated.

Related terms

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