Photo Source: ANI
Income tax clearance certificate not required for all Indians traveling abroad, clarifies CBDT
Babushahi Bureau
New Delhi, August 21, 2024: The Central Board of Direct Taxes (CBDT) has clarified that not all Indians will be required to obtain an income-tax clearance certificate (ITCC) before leaving the country as was earlier reported by a section of media.
"It is being erroneously reported that all Indian citizens must obtain an income-tax clearance certificate (ITCC) before leaving the country - a factually incorrect position," a press statement issued by CBDT stated.
"As per section 230 of the Act, every person is not required to obtain a tax clearance certificate. Only certain persons, in respect of whom circumstances exist which make it necessary to obtain a tax clearance certificate, are required to obtain the said certificate. This position has been in the statute since 2003 and remains unchanged even with the amendments vide Finance (No. 2) Act, 2024," the release noted.
In this context, the Central Board of Direct Taxes (CBDT) has specified that the tax clearance certificate under Section 230(1A) of the Act, may be required to be obtained by persons domiciled in India only where
- 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, or
- where the person has direct tax arrears exceeding Rs. 10 lakh outstanding against him which have not been stayed by any authority.
In view thereof, it is reiterated that the ITCC under Section 230(1A) of the Act, is needed by residents domiciled in India, only in rare cases, such as (a) where a person is involved in serious financial irregularities or (b) where a tax demand of more than Rs. 10 lakhs is pending which is not stayed by any authority, it added.