 |
|
The Central Board of Direct Taxes (CBDT) has issued a clarification concerning Section 230 of the Income Tax Act, 1961, addressing concerns that a tax clearance certificate had become mandatory for individuals leaving India. The CBDT emphasized that this requirement is not universally applicable and applies only under specific circumstances. Section 230 stipulates that individuals involved in significant financial irregularities and those with substantial tax arrears exceeding ₹10 lakh are required to obtain a tax clearance certificate before departing the country.
The tax clearance certificate serves as confirmation that an individual has no outstanding liabilities under various tax laws, including the Income-tax Act, Wealth-tax Act, Gift-tax Act, Expenditure-tax Act, and the Black Money Act, 2015. Its issuance is not automatic and requires documented justification along with prior approval from either the Principal Chief Commissioner of Income-tax or the Chief Commissioner of Income-tax.
The CBDT's clarification aims to dispel any misconceptions surrounding the tax clearance certificate and its mandatory nature. It is intended to provide clarity and ensure that individuals leaving India are not subject to unnecessary bureaucratic hurdles. The focus remains on individuals with substantial tax liabilities or those suspected of financial irregularities. The issuance process itself is subject to stringent scrutiny, highlighting the importance of ensuring compliance with tax laws before departing the country.
Source: Is an Income Tax clearance certificate mandatory to leave India?