Any person domiciled in India has been mandated in The Finance Bill, 2024,Income Tax clearance Certificate to leave India. Clause 71 of the Bill seeks to amend section 230 of the Income-tax Act relating to tax clearance certificates. This amendment will take effect from 1st October, 2024.
The clause reads as, “sub-section (1A) of the said section, provides that no person who is domiciled in India, shall leave India, unless he obtains a certificate from the income-tax authorities stating that he has no liabilities under the Income-tax Act, or the Wealth-tax Act, 1957, or the Gift-tax Act, 1958, or the Expenditure-tax Act, 1987”.
According to Section 230 of the Income-tax Act, anyone living in India must get a certificate from the tax authorities before leaving the country. This certificate confirms that the person has no unpaid taxes or has arranged to pay any outstanding amounts.
However, later the government clarified that, the proposed amendment in Finance Bill does not require every person to obtain a tax clearance certificate. Instead, only specific individuals who meet certain criteria, such as involvement in financial irregularities or having substantial tax arrears, are required to secure this certificate.
Clarification received specifies that If a person is suspected of serious financial misconduct and their presence is crucial for investigations under the Income-tax Act or the Wealth-tax Act, and if it’s likely that a tax demand will be raised against them & If a person has direct tax arrears exceeding Rs 10 lakh that have not been stayed by any authority, they must obtain a tax clearance certificate.
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