Centre says 'not all residents' need tax clearance certificates for travelling abroad

It said only those accused of financial irregularities or having substantial tax arrears need such clearance.

Published on: Jul 28, 2024, 13:03:19 IST

By HT News Desk

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Amid social media outrage triggered by the Budget proposal that made it mandatory to obtain tax clearance certificates for foreign travel, the government on Sunday clarified that the proposed amendment is not for all the residents of India. It said only those accused of financial irregularities or having substantial tax arrears need such clearance.

An Air India aircraft takes off at Kempegowda International Airport in Bengaluru on April 12, 2024. (AFP)

The finance ministry, in the Finance Bill, 2024, has proposed to add the reference of the Black Money Act, 2015, to the list of Acts, under which any person should clear his liabilities to obtain the tax clearance certificate.

Also read: Budget: Tax clearance certificate mandatory for leaving India

"The proposed amendment does not require all the residents to obtain the tax clearance certificate," the ministry said in a statement.

Per section 230 of the Income Tax Act, not every person needs a tax clearance document. Only certain people will be required to obtain the certificate.

Through a 2004 notification, the finance ministry said that the Income Tax department had specified that the tax clearance certificate may be required to be obtained by persons domiciled in India only in certain circumstances. These circumstances include: the person is involved in serious financial irregularities and his presence is necessary in the investigation of cases under the Income-tax Act or the Wealth-tax Act or where the person has direct tax arrears exceeding ₹10 lakh outstanding against him, which have not been stayed by any authority.

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The I-T department said that a person can be asked to obtain a tax clearance certificate only after recording the reasons for the same and after getting approval from the Principal Chief Commissioner of income tax or Chief Commissioner of income tax.

The income tax authorities must grant such a certificate to these individuals, stating that the person has no tax liabilities.

With inputs from PTI

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HT News Desk
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