Tax Clearance Certificate for Foreign Visit

Friends,

Are you going for a Foreign Visit ? The first question arises in mind whether I will be in need of Tax Clearance Certificate for making my Foreign Visit ? The answer of the question is NO. The hassles of obtaining tax clearance certificate for person who are domiciled in India is now a thing of past. You do not need the tax clearance from income tax department for going out of country. What it means that custom authorities can not demand such certificate before letting you catch the plane.

Subsection(1A) of Section 230 is regarding tax clearance certificate provision for domiciled Persons. It states as follows:

“(1A) ……………every person, who is domiciled in India at the time of his departure from India, shall furnish, in the prescribed form to the income-tax authority or such other authority as may be prescribed

• (a) the permanent account number allotted to him under section 139A:

Provided that in case no such permanent account number has been allotted to him, or his total income is not chargeable to income-tax or he is not required to obtain a permanent account number under this Act, such person shall furnish a certificate in the prescribed form;

• (b) the purpose of his visit outside India;
• (c) the estimated period of his stay outside India:”

So,what is the procedure now ?

• If you have Permanent Account Number (PAN) , fill up the Form 30C of the I T Act. and submit with the A.O. The copy of the declaration should be carried with yourself at the time of departure.
• In case you do not have PAN , you will have to submit the Form 31 of the I T Act and carry with you a copy showing that you filed the declaration.

Does it mean that a domiciled person never require tax clearance?The Authority will notify the custom authority in such case. Only in those cases, custom authority can ask for clearance certificate.In this regard Not exactly. It has been decided by the CBDT that only those cases where income tax authority decides that the assessee should take the tax clearance certificate , he shall pass the order that such assessee can not leave the country till he obtains a tax clearance , Instruction : No. 1/2004 [F.No. 142/34/2003-TPL], dated 5-2-2004 issued by Central Board Of Direct Taxes states that in following circumstances , A.Os after taking approval of Chief Commissioner of IT , may order that tax clearance certificate is required for the person leaving the country

1. (i) where the person is involved in serious financial irregularities and his presence is necessary in investigation of cases under the Income-tax Act or the Wealth-tax Act and it is likely that a tax demand will be raised against him, or
2. (ii) where the person has direct tax arrears exceeding Rs. 10 lakh outstanding against him which have not been stayed by any authority.

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