The proposed amendment to section 230(1A) of the Income-tax Act, effective October 1, 2024, will now include liabilities under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015. Previously, this provision only required individuals domiciled in India to obtain a tax clearance certificate for liabilities under the Income-tax Act, Wealth-tax Act, Gift-tax Act, and Expenditure-tax Act before leaving India. The amendment will ensure that individuals must also address any obligations under the Black Money Act to secure this certificate. This change aims to ensure comprehensive compliance with all relevant tax obligations before departure from India.
Budget 2024: Amendment to include the reference of Black Money Act, 2015 for the purposes of obtaining a tax clearance certificate
The existing provisions of sub-section (1A) of section 230 of Act specify that, inter-alia, 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 Income-tax Act, 1961, or the Wealth-tax Act, 1957 (27 of 1957), or the Gift-tax Act, 1958 (18 of 1958), or the Expenditure-tax Act, 1987 (35 of 1987), or he makes satisfactory arrangements for the payment of all or any of such taxes which are or may become payable by that person. Such certificate is required to be obtained where circumstances exist which, in the opinion of an income-tax authority render it necessary for such person to obtain the same.
2. The proviso to the said sub-section further mandates that no income-tax authority shall make it necessary for any person who is domiciled in India to obtain the said certificate unless he records the reasons therefor and obtains the prior approval of the Principal Chief Commissioner or Chief Commissioner of Income-tax.
3. In this regard, it was observed that most of the liabilities arising under the Acts administered by the Central Board of Direct Taxes (CBDT) have been covered in the sub-section (1A) of section 230 of the Act, for the purpose of obtaining a tax clearance certificate, except the liabilities arising under Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 (22 of 2015).
4. In view of the same, it is proposed to insert the reference of liabilities under Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 in the sub-section (1A) of the section 230 of the Act, for the purposes of obtaining a tax clearance certificate.
5. This amendment will take effect from the 1st day of October, 2024.
Extract of Clause 71 of Finance Bill 2024
Clause 71 of the Bill seeks to amend section 230 of the Income-tax Act relating to tax clearance certificate.
Sub-section (1A) of the said section, inter alia, 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, or he makes satisfactory arrangements for the payment of all or any of such taxes which are or may become payable by that person. Such certificate is required to be obtained where circumstances exist which, in the opinion of an income-tax authority render it necessary for such person to obtain the same.
It is proposed to amend the proviso to the said sub-section by inserting the reference of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 therein, so as to impose the liabilities under the said Act for the purposes of obtaining the certificate relating to no liabilities.
This amendment will take effect from 1st October, 2024.
Amendment of section 230.
71. In section 230 of the Income-tax Act, in sub-section (1A), in the proviso, in the long line, after the words and figures “the Expenditure-tax Act, 1987,”, the words, brackets and figures “or the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015,” shall be inserted with effect from the 1st day of October, 2024.
