The Central Government has clarified that not all individuals are required to obtain a mandatory tax clearance before flying abroad, in response to misleading reports suggesting otherwise. The Central Board of Direct Taxes (CBDT) issued a statement under Section 230 of the Income-tax Act, 1961, emphasizing that the requirement for a tax clearance certificate applies only in specific situations.
This clarification follows an amendment proposed by Finance Minister Nirmala Sitharaman to the Budget 2024-25 on July 23. The amendment includes the Black Money Act, 2015, in the list of Acts—such as the Income-tax Act, the Wealth-tax Act, 1957, the Gift-tax Act, 1958, and the Expenditure-tax Act, 1987—under which liabilities must be cleared for the issuance of a tax clearance certificate. This certificate would confirm that an individual has no outstanding liabilities under these laws.
The CBDT underscored that the tax clearance requirement is not universal. It is applicable only to specific cases where individuals are involved in serious financial irregularities, their presence is crucial for ongoing investigations under the Income-tax Act or Wealth-tax Act, and when a tax demand is likely to be raised. Additionally, individuals with direct tax arrears exceeding Rs 10 lakh, not stayed by any authority, will also need to secure a tax clearance certificate.
The CBDT also noted that a tax clearance certificate can only be mandated after recording the reasons and obtaining approval from the Principal Chief Commissioner of Income-tax or the Chief Commissioner of Income-tax. The objective of this clarification is to alleviate public concerns and provide a clearer understanding of when a tax clearance certificate is necessary for international travel.
Original Story https://www.indiatodayne.in/national/story/centre-clarifies-on-tax-clearance-requirements-for-international-travel-1058993-2024-07-28?utm_source=rssfeed
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