The Finance Minister Nirmala Sitharaman has proposed the amendment in the Income Tax Act to include the reference of Black Money Act, 2015 for the purposes of obtaining a tax clearance certificate.

The existing provisions of sub-section (1A) of section 230 of Income Tax Act specify that no person who is domiciled in India, shall leave India, unless he obtains a certificate from the income-tax authorities stating that he has no liabilities under Income-tax Act, 1961, or the Wealth-tax Act, 1957, or the Gift-tax Act, 1958 , or the Expenditure-tax Act, 1987 , or he makes satisfactory arrangements for the payment of all or any of such taxes which are or may become payable by that person. The certificate is required to be obtained where circumstances exist which, in the opinion of an income-tax authority, render it necessary for such person to obtain the same.

The proviso to the sub-section further mandates that no income-tax authority shall make it necessary for any person who is domiciled in India to obtain the certificate unless he records the reasons therefore and obtains the prior approval of the Principal Chief Commissioner or Chief Commissioner of Income-tax.

It was observed that most of the liabilities arising under the Acts administered by the Central Board of Direct Taxes (CBDT) have been covered in the sub-section (1A) of section 230 of the Act, for the purpose of obtaining a tax clearance certificate, except the liabilities arising under Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015.

The Finance Minister has proposed to insert the reference of liabilities under Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 in the sub-section (1A) of the section 230 of the Act, for the purposes of obtaining a tax clearance certificate.

The amendment will take effect from the 1st October, 2024.