Income Tax Clearance Certificate

Income Tax Clearance Certificate is a document issued by the Government of India validating that the person has duly paid all the taxes due and has no pending tax liability.

This certificate is needed to ensure that such a person, before leaving the country, has duly paid all the taxes on the income earned in India by means of business or employment.

#1. When and Who needs an Income Tax Clearance Certificate?

An Income Tax Clearance Certificate is required when any person is leaving India and satisfies all the following 3 conditions, i.e.

  1. He/She is not a resident of India;
  2. Has come to India in connection with business, profession or employment; and
  3. Has income derived from any source in India,

#2.How to get Income Tax Clearance Certificate?

If you are liable to get an Income Tax Clearance Certificate, the first thing that you have to do is,

  • If in employment: take an undertaking in the prescribed form from the employer
  • If in business: take an undertaking in the prescribed form from the person of the income,

to the effect that tax payable by you in respect of the income earned in India shall be paid by the Indian Resident, and then go to the IT department with the undertaking.

On receipt of the same you will immediately get a no objection certificate in the form of Tax Clearance Certificate for leaving India.

 

#3. Who doesn’t need Income Tax Certificate?

A resident Indian who travels abroad for any purpose other than leaving India permanently is not required to get an Income Tax Clearance Certificate but has to furnish his PAN.

A non-resident Indian who had visited the country for any purpose other than business, profession or employment is also not required to get an Income Tax Clearance Certificate while leaving the country.

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