In response to false rumors that required tax approval for anybody traveling outside, the Indian government released an explanation.
Section 230 of the Income-tax Act, 1961 makes it clear that not everyone requires a tax clearance certificate, according to the Central Board of Direct Taxes (CBDT).
Tax Clearance Certificate to Fly Abroad Not Mandatory For All
The explanation comes in response to questions posed following Finance Minister Nirmala Sitharaman’s July 23 Budget 2024–25 presentation.
The budget suggested adding the Black Money Act of 2015 to the list of Acts for which a tax clearance certificate is required only after all responsibilities have been satisfied.
According to the CBDT, the proposed modification does not mandate that all residents get a tax clearance certificate.
The requirement is only applicable in certain situations where circumstances require such permission.
These cases feature those with significant financial irregularities or those who owe more than Rs 10 lakh in unpaid direct tax arrears that have not been halted by any body.
Approval from senior tax officials such as the Principal Chief Commissioner or Chief Commissioner of Income-tax is necessary to obtain a tax clearance certificate.
The purpose of the explanation is to clear up any misunderstandings and reassure the public that the new tax clearance rules won’t hinder normal overseas travel.
The Black Money Act, 2015 was added to the list by the government as part of its efforts to prevent tax evasion and guarantee that tax rules are followed.
What Does Section 230 Say?
The Income-tax Act, 1961, Section 230 does not require everyone to have a tax clearance certificate. The PTI claimed that obtaining the tax clearance certificate will only be necessary in the case of specific individuals, regarding whom circumstances exist, that call for the certificate.
The Income Tax Department had stated in a 2004 statement that individuals who are domiciled in India are only obliged to obtain a tax clearance certificate “under specific circumstances,” according to the ministry.
