CBDT Clarifies Income-Tax Clearance Certificate (ITCC) Requirements

GG News Bureau
New Delhi, 21st August. The Central Board of Direct Taxes (CBDT) has issued a clarification regarding the need for an Income-Tax Clearance Certificate (ITCC) amid reports suggesting that all Indian citizens must obtain the certificate before leaving the country. The CBDT has labeled these reports as factually incorrect.

According to Section 230(1A) of the Income-tax Act, 1961, only specific individuals, under certain circumstances, are required to obtain a tax clearance certificate. This provision, in effect since 2003, was amended by the Finance (No. 2) Act, 2024, to include liabilities under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, in addition to the existing liabilities under the Income-tax Act, 1961.

The CBDT emphasized that the amendment does not impose a blanket requirement for all Indian citizens to obtain an ITCC. The certificate is required only in rare cases, such as when an individual is involved in serious financial irregularities or has direct tax arrears exceeding Rs. 10 lakh, which have not been stayed by any authority.

This clarification was issued following widespread misinformation regarding the amendment. The CBDT reiterated that the requirement for an ITCC remains unchanged since 2003 and is applicable only to specific cases, not to all citizens.