The Union Ministry of Finance on July 28, 2024 clarified that the proposed amendments to the Black Money Act in Union Budget 2024-25 does not require all residents travelling overseas to obtain a tax clearance certificate.
The Union Ministry of Finance has clarified that the tax clearance certificate requirement for travel overseas does not apply to all residents. Read on to know more
The Union Ministry of Finance on July 28, 2024 clarified that the proposed amendments to the Black Money Act in Union Budget 2024-25 does not require all residents travelling overseas to obtain a tax clearance certificate.
The Centre clarified that the amendment is only applicable to those facing probe or having large tax arrears. Section 230 of the Income-tax Act, 1961 mandates that those persons involved in serious financial irregularities and whose presence is required for investigations or those with tax arrears in excess of Rs 10 lakh must obtain a tax clearance certificate to travel overseas.
Budget 2024-25 introduced a new amendment mandating individuals domiciled in India to clear their tax dues and obtain clearance certificates before leaving the country. This will be effective from October 1, 2024, under the Black Money Act, amending section 230 of the Income-tax Act, 1961.
However, the Centre has now issued a clarification, stating that this does not apply to all residents following a social media outrage against making the said certificate mandatory for all.
A new bill proposed to “amend the provision 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.”
The recent Budget proposes to eliminate the Rs 10 lakh penalty for failure to report foreign assets when the total value is below Rs 20 lakh, a relaxation for taxpayers who unintentionally overlooked reporting small-scale overseas assets. Additionally, measures to reduce litigation include decriminalising delays in TDS payment and providing immunity from penalty and prosecution for benamidars on full disclosure.