Need Income Tax Clearance Certificate For Travel Abroad? No, Says CBDT Clarifies Reports 'Factually Incorrect'. Details


(MENAFN- Live Mint) The Ministry of Finance has dismissed the reports which said that all Indian citizens must obtain income-tax clearance certificate (ITCC) before leaving the country.

In an official statement from the Ministry of Finance on August 20, the Central Board of Direct Taxes (CBDT) said,“It is being erroneously reported that all Indian citizens must obtain income-tax clearance certificate (ITCC ) before leaving the country - a position that is factually incorrect.”

The requirement is thus“rare”, the release added. It 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 ₹10 lakhs is pending which is not stayed by any authority, it added.

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Further, the CBDT specified that ITCC, may be required only where an Indian resident is involved in serious financial irregularities and his presence is necessary in investigation of cases under the Income-Tax (IT) Act or the Wealth-tax Act.“It is likely that a tax demand will be raised against the person,” the release stated.

It is required when the person has direct tax arrears exceeding ₹10 lakh outstanding against him which have not been stayed by any authority.

Further, a person can be asked to obtain an ITCC only after recorded reasons for the demand and with approval from the Principal Chief Commissioner of Income-tax or Chief Commissioner of Income-tax.

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The release noted that Section 230 (1A) of the Income-tax Act, 1961 (the 'Act') relates to obtaining a tax clearance certificate ,“in certain circumstances”, by persons domiciled in India.

Adding,“The said provision, as it stands, came on the statute through the Finance Act. The Finance (No.2) Act, 2024, has made only an amendment in Section 230(1A) of the Act, vide which, reference of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 (the 'Black Money Act') has been inserted in the said Section.”

“This insertion has been made to also cover the liabilities under the Black Money Act in the same manner as the liabilities under the Income-tax Act, 1961, and other Acts dealing with direct taxes for the purpose of Section 230(1A) of the Income-tax Act, 1961,” it said.

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"There appears to be misinformation about the said amendment emanating from an incorrect interpretation of the amendment. It is being erroneously reported that all Indian citizens must obtain an ITCC before leaving the country. This position is factually incorrect," the press release said.

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.

(With inputs from ANI)

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