The Central Board of Direct Taxes (CBDT) has issued a clarification regarding the ongoing speculations about making Income Tax Clearance Certificate (ITCC) mandatory for travelling abroad. Contrary to recent reports, it is not mandatory for all citizens to obtain Income Tax Clearance Certificate before travelling abroad. As per the current provisions and instructions, Income Tax Clearance Certificate will be required only for those who have serious cases related to financial irregularities going on against them or who have dues of Rs 10 lakh under Direct Tax
The Central Board of Direct Taxes (CBDT) has issued a clarification regarding the ongoing speculations about making Income Tax Clearance Certificate (ITCC) mandatory for travelling abroad. Contrary to recent reports, it is not mandatory for all citizens to obtain Income Tax Clearance Certificate before travelling abroad. In fact, a provision was made in this regard through the Finance Act, 2003 and it mentions the circumstances when it becomes necessary for a person residing in India to obtain a Tax Clearance Certificate.
The recent amendment has only added a reference to the Black Money (Undisclosed Foreign Income and Assets) and Tax Act, 2015 to ensure that liabilities under this Act will be treated like liabilities under the Income Tax Act. CBDT has clarified that the ITCC rule applies only in special circumstances.
According to the current provisions and instructions, Income Tax Clearance Certificate will be required only for those people against whom serious cases related to financial irregularities are going on or who have a pending amount of Rs 10 lakh under Direct Tax and no ban has been imposed on it. This regulation has been in place since 2003 and there is no change in it with the recent amendment.
The CBDT notification also states that the reasons for obtaining Income Tax Clearance Certificate will have to be given and its approval will be given by the Principal Chief Commissioner of Income Tax or Chief Commissioner of Income Tax. Broadly, CBDT clearly states that Income Tax Clearance Certificate is not necessary for all Indians going abroad, but it may be needed only by those who are trapped in major financial irregularities.
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