The mandate to obtain tax clearances for residents leaving India is not for everyone, the finance ministry clarified on July 28.

"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," the ministry said.

The Budget for 2024-25 introduced a few amendments for those planning to move abroad from India.

The ministry added that only in certain cases would an individual need to obtain such a tax clearance:

-Where the person is involved in serious financial irregularities and his presence is necessary in 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.

-Where the person has direct tax arrears exceeding Rs 10 lakh which have not been stayed by any authority.

"Further, a person can be asked to obtain a tax clearance certificate only after recording the reasons for the same and after taking approval from the Principal Chief Commissioner of Income-tax or Chief Commissioner of Income-tax," the ministry said in a statement.

The Budget introduced a change to ensure that no one having tax liabilities under the Black Money rules will leave the country without a clearance from the authorities. However, the rules under Section 230 apply differently to residents and non-residents.

On the tweak in the Budget pertaining to the requirement of a no-liabilities clearance certificate with respect to black money, the ministry said, "it has been proposed to add the reference of Black Money Act, 2015 in the list of Acts under which any person should clear his liabilities in order to obtain the tax clearance certificate."