In reference to some misleading reports being circulated that a mandatory tax clearance is required for all Indians before flying abroad, the government has clarified that under section 230 of the Income-tax Act, 1961, every person is not required to obtain a tax clearance certificate.


In the Budget 2024-25, tabled on July 23 by Finance Minister Nirmala Sitharaman, it has been proposed to include the reference to the Black Money Act, 2015 to obtain a tax clearance certificate.

Such a certificate is required to be issued by the income-tax authority stating that such person has 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.

Since, the Black Money Act, 2015 is also administered by CBDT, it has been proposed in the Budget to add the reference of the Black Money Act, 2015 to the list of Acts under which any person should clear his liabilities to obtain the tax clearance certificate.

Hence, the proposed amendment does not require all the residents to obtain the tax clearance certificate, the Central Board of Direct Taxes (CBDT) said in its clarification today.

As per section 230 of the Income-tax Act, 1961, every person is not required to obtain a tax clearance certificate.

Only in the case of certain persons, in respect of whom circumstances exist which make it necessary to obtain a tax clearance certificate will be required to obtain such certificate.

Such a clearance certificate is necessary where an individual is involved in serious financial irregularities and his presence is necessary in the investigation of cases under the Income-tax Act or the Wealth-tax Act and it is likely that a tax demand will be raised against him.

Also, such a tax clearance certificate would be needed where the individual has direct tax arrears exceeding Rs 10 lakh outstanding against him which have not been stayed by any authority.

CBDT today also apprised that a person can be asked to obtain a tax clearance certificate only after recording the reasons for the same and after getting approval from the Principal Chief Commissioner of Income-tax or Chief Commissioner of Income-tax.