The Budget has made the rules stricter for obtaining clearance certificates, which are needed to leave India. Starting October 1, anyone living in India will need a clearance certificate confirming they are clear under the Black Money Act.
This requirement covers taxes under the Income-tax (I-T) Act, as well as the former Wealth Tax, Gift Tax, and Expenditure Tax Acts. (AP/File)
According to section 230 of the Income-tax (I-T) Act, anyone living in India must get a certificate from the tax authorities before leaving the country.
This certificate confirms that the person has no unpaid taxes or has arranged to pay any outstanding amounts.
This requirement covers taxes under the Income-tax (I-T) Act, as well as the former Wealth Tax, Gift Tax, and Expenditure Tax Acts.
Tax experts believe that a notification or upcoming rules will clarify the requirements further, the Times of India reported.
The 2024 Budget also proposed removing the ₹10 lakh penalty under sections 42 and 43 of the Black Money Act for not reporting foreign assets (other than real estate) if their total value is less than ₹20 lakh. This change will be effective from October 1, 2024.
This exemption from penal provisions also applies to incorrect or non-reporting of these foreign assets, Economic Times stated.
The provision means that every resident, who is ordinarily a resident of India, must disclose all foreign assets (including investments like shares and securities) and any income from these assets when filing their Income Tax Return.
If they do not report foreign income and assets or fail to submit the ITR related to them, they may face a penalty of ₹10 lakh under sections 42 or 43 of the Black Money Act, regardless of the asset's value.
However, these sections do not apply to one or more bank accounts with a total balance not exceeding ₹5 lakh at any time during the previous year.
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Source: https://www.hindustantimes.com/india-news/budget-tax-clearance-certificate-mandatory-for-leaving-india-101721834830824.html
