 "Finance Minister Nirmala Sitharaman with her team outside the finance ministry in Delhi on July 23")
The Union Budget has proposed to include the Black Money Act in the list of Acts under which residents can clear their due tax liabilities | Photo: PTI
The finance ministry issued a clarification on Sunday regarding the new rule that mandates Indians migrating abroad to obtain a tax clearance certificate before departing the country under the Black Money Act.
Citing the 2004 rules, the ministry stated that a tax clearance certificate is necessary only for individuals involved in serious financial irregularities or those with significant direct tax arrears exceeding Rs 10 lakh, provided any authority has not stayed these arrears.
The rule, effective from October 1, was introduced with the intent to combat tax evasion concerning undisclosed foreign assets. However, it has stirred debate, claiming that it could lead to harassment.
The ministry further clarified that a person can be asked to obtain a tax clearance certificate only after recording the reasons for the same and after taking approval from the Principal Chief Commissioner of Income Tax or Chief Commissioner of Income Tax.
“The proposed amendment (Section 230 of the Income Tax Act) does not require all residents to obtain a tax clearance certificate,” the ministry said.
The Union Budget has proposed to include the Black Money Act in the list of Acts under which residents can clear their due tax liabilities.
Such a certificate is required to be issued by the income tax authority stating that the individual has no liabilities under the Income Tax Act, the Wealth Tax Act, 1957, the Gift Tax Act, 1958, or the Expenditure Tax Act, 1987.
This certificate will verify that the individual has no outstanding tax liabilities or has made satisfactory arrangements to settle such dues before leaving India.
First Published: Jul 28 2024 | 11:44 AM IS