The NHRC's remarks came in response to views from it sought by the Parliamentary Standing Committee on Finance headed by Yashwant Sinha on National Identification Authority of India Bill introduced last December.
The Bill seeks to establish National Identification Authority of India for issuing 'Aadhaar' numbers to Indian residents to facilitate access to benefits and services.
The Commission was of the view that in the proposed provisions in the bill, the "possibility of discrimination cannot be ruled out" as the bill provides that every resident shall be entitled to obtain an Aadhaar number, but does not say that it would be issued to all citizens.
Emphasising the need for adequate safeguards against discrimination, the Commission noted that the issuance of an Aadhaar number has not been made compulsory under the Bill and residents who do not obtain one may find themselves at a disadvantage vis-a-vis those who do.
"Since the Aadhaar number is to be used and applied 'for delivery of various benefits and services', a citizen who does not have one may be denied access to these, while a resident, who may not be a citizen, would have access if he had obtained an Aadhaar number," the NHRC said.
The Commission also expressed similar concerns raised by a section of activists that the stored bio-metric information could be tampered with. "The possibility of tampering with stored biometric information cannot be ruled out, though the Bill sets out the precautions envisaged," it said.
The NHRC noted that the "biometric information" and "demographic information" have not been clearly defined and while framing the regulations under the Act, precautions should be taken to ensure that individuals are not required to disclose confidential information about themselves.
Noting that the Bill does contain provision for punishment and penalties for those who violate the protection of information clauses, the NHRC pointed out the need to include provisions for compensation to the victim.
The Commission was also of the view that the verification of the details provided by an applicant should be done before the number is issued.
The rights body said it appeared that the process of verification of the correctness of the information or data furnished by the individual will be done from the person concerned after issuing an Aadhaar number.
The NHRC also did not agree with issuance of guidelines to courts for exercising its discretion on use of information related to Aadhaar numbers.
"The courts follow judicial principles in issuing directions and it would not be advisable to lay down guidelines for the exercise of their discretion. However, guidelines may be laid down in the regulations for officers who may issue directions for the disclosure of information in the interest of national security," it said.
The NHRC also recommended that the Authority should take into consideration the difficulties and problems which women, children, senior citizens and persons with disability are likely to face in registering or verifying their biometrics.