Centre Clarifies ‘Not All Residents’ Need Tax Clearance for Foreign Travel

Amid social media anger over the Budget plan, which would need tax clearance certificates for international travel, the government clarified on Sunday that the proposed modification does not apply to all Indian residents. It stated that only individuals suspected of financial wrongdoing or with significant tax arrears require such clearance.

In the Finance Bill 2024, the finance ministry has proposed including the Black Money Act, 2015, in the list of statutes requiring individuals to clear their liabilities before obtaining a tax clearance certificate.

“The proposed amendment does not require all the residents to obtain the tax clearance certificate,” the ministry stated.

According to Section 230 of the Income Tax Act, not everyone requires a tax clearance document. Only specific individuals will be required to earn the certificate.

According to a 2004 announcement, the Finance Ministry stated that the Income Tax Department has stipulated that people domiciled in India may be required to get a tax clearance certificate only under particular situations.

In some cases, a person’s presence is required to investigate serious financial irregularities under the Income-tax Act or Wealth-tax Act, or if they have outstanding direct tax arrears exceeding ₹10 lakh that have not been stayed by an authority.

The I-T department stated that a person can be asked to acquire a tax clearance certificate only after noting the reasons for the request and receiving approval from the Principal Chief Commissioner of Income Tax or Chief Commissioner of Income Tax.