The Central Board of Direct Taxes (CBDT) has addressed recent confusion about whether an Income Tax Clearance Certificate (ITCC) is required for international travel.
Contrary to some reports, it is not mandatory for all citizens to get an ITCC before traveling abroad.
ITCC Requirements
The requirement for an ITCC was established by the Finance Act, 2003. This Act specifies the conditions under which an ITCC is necessary for people residing in India.
The recent amendment only incorporates a reference to the Black Money (Undisclosed Foreign Income and Assets) and Tax Act, 2015.
This ensures that liabilities under the Black Money Act are treated similarly to those under the Income Tax Act.
Specific Circumstances for ITCC
According to current rules, an ITCC is only needed for individuals who are involved in serious financial irregularities or who owe Rs 10 lakh or more in direct taxes.
This rule has been in place since 2003, and the recent amendment does not change it.
The CBDT also stated that reasons for needing the ITCC must be provided, and approval must be obtained from the Principal Chief Commissioner or Chief Commissioner of Income Tax.
In summary, the ITCC is not required for all Indians traveling abroad but may be necessary for those facing significant financial issues.
