Income Tax Clearance Certificate for travel outside India

By: Gauri Sham Deshpande - 27th August, 2024

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Recently, there have been a lot of questions regarding obtaining ITCC (Income tax clearance certificate) travel outside India. Let us review this in detail.

The matter regarding obtaining tax clearance certificate is dealt in Sec 230 of Income tax Act.

Section 230 (1) deals with Non-residents who have traveled to India for the purpose of Business, Profession or Employment and requires to obtain ITCC (Income tax clearance certificate)

Section 230 (1A), deals with the Residents who, in certain circumstances, are required to obtain ITCC (Income tax clearance certificate). The resident, in certain circumstances, requires to obtain a certification stating that he has no liabilities or he has made satisfactory arrangements for the payment of his/her liabilities under following Acts:

  1. Income Tax Act
  2. Wealth Tax Act, 1957
  3. The Gift Tax, 1957
  4. Expenditure Act, 1987

Finance Act (no.2) 2024 has added the following addition to the above list of Acts:

  1. Black Money (Undisclosed Foreign Income and Assets)
  2. Imposition of Tax Act, 2015(Black Money Act)

CBDT vide Instruction No. 1/2004, dated 5 February 2004, has specified the following circumstance under which a Resident in India is required the obtain ITCC (Income tax clearance certificate)

  1. Where the person is involved in serious financial irregularities and his presence is necessary in investigation of cases under the ITA or the Wealth-tax Act and it is likely that a tax demand will be raised against him, or
  2. Where the person has direct tax arrears exceeding INR 10lakhs (INR 1Million) outstanding against him which have not been stayed by any authority.

Based on the above analysis, not all Individuals are required to obtain ITCC (Income tax clearance certificate).

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