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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 Section 230 (1A) of the Income-tax Act, 1961(the Act) relates to obtaining of a tax clearance certificate, in certain circumstances,by persons domiciled in India. The said provision, as it stands, came on the statute through the Finance Act, 2003 w.e.f. 1.6.2003. The Finance (No.2) Act, 2024 has made only an amendment i
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FAQ :
No, this is factually incorrect. Only certain individuals, under specific circumstances, are required to obtain an ITCC. This requirement has been in place since 2003 and remains unchanged.
The Finance (No.2) Act, 2024, has inserted a reference to the Black Money Act into Section 230(1A). This amendment ensures that liabilities under the Black Money Act are also covered for the purpose of the tax clearance certificate, similar to liabilities under the Income-Tax Act.
An ITCC may be required if a person is involved in serious financial irregularities and their presence is needed for investigations, or if they have outstanding direct tax arrears exceeding Rs. 10 lakh that have not been stayed.
A person can only be asked to obtain a tax clearance certificate after the reasons for doing so have been recorded and approval has been obtained from the Principal Chief Commissioner of Income-tax or Chief Commissioner of Income-tax.
No, the fundamental requirement for an ITCC has not changed. The amendment primarily broadens the scope to include liabilities under the Black Money Act, but the conditions under which an ITCC is needed remain the same for residents domiciled in India.
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