Indians are required to obtain a tax clearance certificate before leaving the country
The budget has also tightened the rules for obtaining the clearance certificate required to leave India. From October 1, any person living in India will need a clearance certificate confirming their innocence under the Black Money Act.
As per Section 230 of the Income Tax (I-T) Act, any resident of India must obtain a certificate from the tax authorities before leaving the country. This certificate confirms that the person has no tax dues or has made arrangements to pay the dues.
This requirement covers taxes under the Income Tax (I-T) Act as well as the earlier wealth tax, gift tax and expenditure tax act.
Tax experts expect a notification or upcoming rules to further clarify the requirements, reports the Times of India.
Budget 2024 also proposes to remove the penalty of ₹10 lakh for non-disclosure of foreign assets (other than immovable property) if the total value of the assets is less than ₹20 lakh under sections 42 and 43 of the Black Money Act. This change will come into effect from October 1, 2024.
This exemption from penal provisions also applies to misrepresentation or non-reporting of these foreign assets, reports Economic Times.
As per this provision, every resident ordinarily resident in India has to disclose all foreign assets (including investments such as stocks and bonds) and any income arising from these assets while filing their income tax returns. If they do not report foreign income and assets or fail to submit ITR relating to them, they will be liable to a penalty of ₹10 lakh under section 42 or 43 of the Black Money Act, regardless of the value of the assets. However, these sections will not apply to one or more bank accounts in which the aggregate balance does not exceed ₹5 lakh at any time during the previous year.
