Tax Clearance Certificate For All Going Out of India? No, Claim is False

The finance ministry clarified that it is for those with financial irregularities or major tax arrears.

Fact-Check: It is only for those with financial irregularities and owing a significant sum in direct taxes.

(Source: The Quint) 

Social media users have shared a post which claims that the new finance bill mandated all Indian citizens to provide a tax clearance certificate before leaving the country.

• They added that the regulation would come into force on 1 October.

An archive of the post can be found here. 

(Source: X/Screenshot)

(Archives of similar claims can be found here and here.)

Is this true?: The claim is false.

• The Finance Ministry specified that only those individuals facing allegations of financial irregularities or owing a significant amount in taxes are required to do the same.

How did we find out?: At first, we looked at the new finance bill and found what it had to say about the certificate.

The bill stated that no person who is domiciled in India shall leave the country unless they obtained a certificate from the income-tax authorities which stated that they have no liabilities under the Income-tax Act, or the Wealth-tax Act, 1957, or the Gift-tax Act, 1958, or the Expenditure-tax Act, 1987, or they make satisfactory arrangements for the payment of all or any of such taxes which are or may become payable by that person

The bill also noted that such a certificate was required to be obtained where circumstances exist which, in the opinion of an income-tax authority render it necessary for such a person to obtain the same.

Excerpt from the Finance Bill 2024. 

(Source: Finance Ministry) 

• The Bill also suggested changing the provision in the sub-section to mention the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, to enforce liabilities for obtaining a certificate showing no liabilities.

• We came across news reports by the Press Trust of India (PTI) and The Hindu from 28 July which stated that following a controversy on social media over purportedly obtaining the certificate by all before leaving the country, the government clarified that the proposed amendment was not for all, and only those accused of financial irregularities or having substantial tax arrears need such clearance.

• The Central Board of Direct Taxes (CBDT) also released a statement on 20 August in which it noted that the certificate was not required for every person but only for those with financial irregularities or owed direct taxed arrears exceeding Rs 10 lakh.

Statement from 20 August by the CBDT.

(Source: PIB) 

Conclusion: A false claim has been spread that the tax clearance certificate will be required by all Indian citizens going outside the country.

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