Tax clearance certificate not required for all Indian citizens travelling abroad: Check govt’s latest clarification

The Central Board of Direct Taxes (CBDT) has issued a clarification regarding the ongoing speculation 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 in this regard was made 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.

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The recent amendment only adds 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. The CBDT has clarified that the ITCC rule applies only under specific circumstances.

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According to the current provisions and instructions, income tax clearance certificate will be required only for those people against whom serious cases of financial irregularities are going on or who have a dues of Rs 10 lakh under direct tax and no ban has been imposed on it. This regulation has been in place since 2003 and the recent amendment has not brought any change in it.

It has also been said in the CBDT notification that reasons have to be given for obtaining the Income Tax Clearance Certificate and its approval will be given by the Principal Chief Commissioner of Income Tax or Chief Commissioner of Income Tax. Broadly, CBDT has clearly stated that the Income Tax Clearance Certificate is not necessary for all Indians going abroad, but only those people who are caught in big financial irregularities may need it.

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