ALL ABOUT NEW INCOME TAX CLEARANCE CERTIFICATE RULES AS PER ‘THE FINANCE (NO.2)ACT,2024’:
New government laws need a tax clearance certificate from October 1, 2024. Understand the ramifications of the harsher exit norms, including amendments to the Black Money Act. Ensure a hassle-free travel by remaining informed. Starting from 1 October 2024, the Government of India has introduced new regulations requiring all Indian citizens to obtain a Tax Clearance Certificate (TCC) before leaving the country. This measure aims to ensure compliance with tax obligations and prevent tax evasion.
What is Income Tax Clearance Certificate?
The Income Tax Clearance Certificate serves as a proof that an individual has fully discharged tax obligations and there is no tax arrears pending against his or her PAN.
Clarifying media reports, the CBDT release has said that “it is being erroneously reported that all Indian citizens must obtain income-tax clearance certificate (ITCC) before leaving the country – a position that is factually incorrect.”
The CBDT has said that there was a misinterpretation of Section 230 (1A) of the Income-tax Act, 1961. “The Finance (No.2) Act, 2024 has made only an amendment in Section 230(1A) of the Act, vide which, reference of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 (the ‘Black Money Act’) has been inserted in the said Section.”
This insertion has been made to also cover the liabilities under the Black Money Act in the same manner as the liabilities under the Income-tax Act, 1961 and other Acts dealing with direct taxes for the purpose of Section 230(1A) of the Income-tax Act, 1961, the release said.
As per the Income Tax Act, not all citizens planning to travel abroad need to obtain a tax clearance certificate. Only certain individuals, in respect of whom circumstances exist which make it necessary to obtain a tax clearance certificate, are required to obtain the said certificate.
Tax Clearance Certificate for Foreign Travel ‘Not for All’: CBDT
The Income Tax Department has come out with a clarification in response to news reports incorrectly interpreting Income Tax Clearance Certificate rules. The Central Board of Direct Taxes (CBDT) has explained under what circumstances Indian citizens will be required to obtain an Income Tax Clearance Certificate (ITCC) before travelling abroad.
There were media reports suggesting that ITCC would be mandatory to obtain if an Indian citizen is travelling abroad, prompting the tax department to issue a clarification in this regard.
ITCC is required to be obtained by certain individuals under following conditions:
• Where the person is involved in serious financial irregularities and his presence is necessary in investigation of cases under the Income-Tax Act or the Wealth-Tax Act and it is likely that a tax demand will be raised against him.
• Where the person has direct tax arrears exceeding Rs 10 lakh outstanding against him which have not been stayed by any authority.
Further, a person can be asked to obtain a tax clearance certificate only after recording the reasons for the same and after taking approval from the Principal Chief Commissioner of Income-Tax or Chief Commissioner of Income-Tax.
Disclaimer :- (You are advised to consult your Legal Counsel before taking any decisions. This is issued only for the purpose of public awareness and information. The Contributor or any of his employees/associates will not take any responsibility for any actions of the reader based directly or indirectly on the basis of the above Article.)
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