CBDT Clarifies All Conditions for Income-tax Clearance Certificate

The Central Board of Direct Taxes (CBDT) mentioned clarifying the problems in answer to the misinformation that the recent revision to Section 230(1A) of the Income-tax Act, 1961, does not need all Indian citizens to have an income tax clearance certificate (ITCC) before travelling to other countries.

As per the Central Board of Direct Taxes (CBDT) the amendment made via the Finance (No. 2) Act, 2024, only incorporates references to the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 (the ‘Black Money Act’).

CBDT in the statement mentioned that “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 Section 230(1A) of the Income-tax Act,1961.”

The necessity to acquire an ITCC is not ubiquitous: CBDT

As per CBDT since its start in 2003, the provision has merely applied to individuals in particular situations. Only some people concerning whom the situation took place which make it important to have a tax clearance certificate, are needed to have the mentioned certificate. The same has been in the regulatory since 2003 and remains unchanged even with the revisions vide Finance (No. 2) Act, 2024.

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U/s 230(1A) of the Act, the tax clearance certificate may be needed to be received via the individuals domiciled in India merely in the below situations-

• The individuals engaged in serious financial irregularities.
• Those who have direct tax arrears surpassing Rs 10 lakh that have not been stayed by any authority.
• An individual could seek to have a tax clearance certificate merely after recording the reasons for it and post taking the approval via the Principal Chief Commissioner of Income-tax or Chief Commissioner of Income-tax.