Budget 2024: Govt mulls stringent norms for clearance certificate needed for residents leaving India
July 25, 2024
The 2024 Budget has introduced more stringent rules for obtaining clearance certificates required for leaving India. Starting October 1, they will need a clearance certificate confirming compliance with the Black Money Act, 2015.
Budget 2024: Finance Minister Nirmala Sitharaman has introduced more stringent rules for obtaining clearance certificates required for residents leaving India. Starting October 1, residents of India will need a clearance certificate confirming compliance with the Black Money Act for leaving India.
As per section 230 of the Income-tax (I-T) Act, any individual residing in India must obtain a certificate from tax authorities before departure. This certificate ensures that the person has no unpaid taxes or has made arrangements to settle any outstanding amounts.
This requirement extends to taxes under the Income-tax (I-T) Act, as well as the former Wealth Tax, Gift Tax, and Expenditure Tax Acts.
Tax experts anticipate that a forthcoming notification or rules will provide further clarification on these requirements, according to the Times of India.
Additionally, the 2024 Budget proposes eliminating the ₹10 lakh penalty under sections 42 and 43 of the Black Money Act for not reporting foreign assets (excluding real estate) if their total value is less than ₹20 lakh. This change will take effect from October 1, 2024.
The Economic Times reported that this exemption from penal provisions also applies to incorrect or non-reporting of these foreign assets.
Under the new provision, residents who are ordinarily residents of India must disclose all foreign assets, including investments like shares and securities, as well as any income from these assets when filing their Income Tax Return. Failure to report foreign income and assets or to submit the relevant ITR can result in a penalty of ₹10 lakh under sections 42 or 43 of the Black Money Act, irrespective 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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