The revisions to the law, proposed in the wake of a militant attack in the capital Jakarta in January, include detention without trial for up to three months and allow the arrest of people "if they assemble to discuss terrorist and radical acts".
The International Commission of Jurists and other rights groups said in a joint statement that the proposed amendments are "an attack on human rights".
"The proposed amendments would authorise unnecessarily prolonged detention of suspects, putting them at risk of torture, ill-treatment, enforced disappearance, and arbitrary detention," said the statement.
Other rights NGOs raised concerns over a proposal to strip Indonesians of citizenship if they join overseas militant organisations, arguing such a move would leave people stateless. Government officials were not immediately available for comment.
The legislation is pending parliamentary approval and government officials have urged MPs to pass revisions as soon as possible, citing a persistent security threat from militants in the world's most populous Muslim nation.
January's attack in Jakarta, which killed eight people including four attackers, announced the arrival of Islamic State in Southeast Asia. Since then, Indonesian police have rounded up
dozens of suspected militants across the island of Java.
Earlier this week, Indonesian anti-terror forces killed two ethnic Uighur Chinese men on Sulawesi island where they had joined the country's most high-profile Islamic State supporter.
Indonesia's proposed counter-terrorism measures are not as harsh as those in neighbouring countries.
Malaysia last April reintroduced a law under which individuals can be detained without trial for up to two years with two-year extensions thereafter.
Australia has in recent years passed measures banning its citizens from returning from conflict zones in Syria and the Middle East, while making it easier to monitor domestic
communications.