The Union Finance Minister Nirmala Sitharaman has recently proposed an amendment in the Income Tax Act to include Black Money Act, 2015 for Obtaining Tax Clearance Certificate.
The objective of the proposed amendment is to ensure that the individual domiciled in India must clear all the tax liability before leaving India. The term Tax Clearance certificate has been elaborated under section 230 of the Income Tax Act which states that anyone living in India must get a certificate from the Tax Authorities before leaving the country, this certificate can be secured only by the person who has paid all the Tax dues or has arranged to pay any of the outstanding amount.
The finance ministry by the finance bill 2024 has amended section 230 of the Income Tax Act.
In Section 230 (1A) of the Income Tax Act in the long line after the words and figures “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 1st october 2024. It is noteworthy that the proposed amendment does not require every person to obtain a tax clearance certificate.
Section 230. Tax clearance certificate.
– [(1) Subject to such exceptions as the Central Government may, by notification in the Official Gazette, specify in this behalf, no person,-
- who is not domiciled in India;
- who has come to India in connection with business, profession or employment; and
- who has income derived from any source in India, shall leave the territory of India by land, sea or air unless he furnishes to such authority as may be prescribed-
- an undertaking in the prescribed form from his employer; or
(ii) through whom such person is in receipt of the income, to the effect that tax payable by such person who is not domiciled in India, shall be paid by the employer referred to in clause (i) or the person referred to in clause (ii), and the prescribed authority shall, on receipt of the undertaking, immediately give to such person a no objection certificate, for leaving India:
Provided that nothing contained in sub-section (1) shall apply to a person who is not domiciled in India but visits India as a foreign tourist or for any other purpose not connected with business, profession or employment.
(1-A) Subject to such exceptions as the Central Government may, by notification in the Official Gazette, specify in this behalf, every person, who is domiciled in India at the time of his departure from India, shall furnish in the prescribed form to the income-tax authority or such other authority as may be prescribed-
- the permanent account number allotted to him under section 139-A:
Provided that in case no such permanent account number has been allotted to him, or his total income is not chargeable to income-tax or he is not required to obtain a permanent account number under this Act, such person shall furnish a certificate in the prescribed form;
- the purpose of his visit outside India;
- the estimated period of his stay outside India:
Provided that no person-
(i) who is domiciled in India at the time of his departure; and
(ii) in respect of whom circumstances exist which, in the opinion of an income-tax authority render it necessary for such person to obtain a certificate under this section, shall leave the territory of India by land, sea or air unless he obtains a certificate from the income-tax authority stating that he has no liabilities under this Act, 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 that satisfactory arrangements have been made for the payment of all or any of such taxes which are or may become payable by that person:
Provided that no income-tax authority shall make it necessary for any person who is domiciled in India to obtain a certificate under this section unless he records the reasons therefor and obtains the prior approval of the Chief Commissioner of Income-tax.]
(2) If the owner or charterer of any ship or aircraft carrying persons from any place in the territory of India to any place outside India allows any person to whom sub-section (1) [or the first proviso to sub-section (1-A)] [ Inserted by Act 54 of 2003, Section 11 (w.r.e.f. 1.6.2003).] applies to travel by such ship or aircraft without first satisfying himself that such person is in possession of a certificate as required by that sub-section, he shall be personally liable to pay the whole or any part of the amount of tax, if any, payable by such person as the [Assessing Officer] [ Substituted by Act 4 of 1988, Section 2, for ” Income-tax Officer” (w.e.f. 1.4.1988).] may, having regard to the circumstances of the case, determine.
(3) In respect of any sum payable by the owner or charterer of any ship or aircraft under sub-section (2), the owner or charterer, as the case may be, shall be deemed to be an assessee in default for such sum, and such sum shall be recoverable from him in the manner provided in this Chapter as if it were an arrear of tax.
(4) The Board may make rules for regulating any matter necessary for, or incidental to, the purpose of carrying out the provisions of this section.
Explanation. – For the purposes of this section, the expressions “owner” and “charterer” include any representative, agent or employee empowered by the owner or charterer to allow persons to travel by the ship or aircraft.