The Central Board of Direct Taxes (CBDT) has issued a clarification addressing recent misinformation regarding the need for an income-tax clearance certificate (ITCC) for Indian citizens travelling abroad. Contrary to recent reports, all Indian citizens don’t need to obtain an ITCC before leaving the country.
This section, originally enacted through the Finance Act, of 2003, pertains to the circumstances under which a tax clearance certificate must be obtained by persons domiciled in India. The recent amendment merely adds references to the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, ensuring that liabilities under this Act are treated similarly to those under the Income-tax Act.

CBDT highlighted that the requirement for an ITCC applies only in specific scenarios. As per the existing provisions and instructions, only individuals involved in serious financial irregularities or those with direct tax arrears exceeding Rs. 10 lakh (not stayed by any authority) need to obtain the ITCC. This regulation has been in place since 2003 and remains unchanged by the recent amendment.

The Central Board of Direct Taxes (CBDT) clarified that an ITCC is required only in specific cases:
Serious Financial Issues: If someone is involved in major financial problems and their presence is needed for investigations.
Large Unpaid Taxes: If a person owes more than Rs. 10 lakh in taxes that are not on hold by any authority.
The notification further added that the process to obtain an ITCC involves recording specific reasons and obtaining approval from the Principal Chief Commissioner of Income or Chief Commissioner of income tax.
In summary, the CBDT stresses that obtaining an ITCC is not a blanket requirement for all Indian citizens travelling abroad but is reserved for exceptional cases involving significant financial issues.