This section, originally enacted through the Finance Act, 2003, deals with the circumstances under which persons domiciled in India are required to obtain a tax clearance certificate. The recent amendment simply adds references to the Black Money (Undeclared 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.
The CBDT stressed that the requirement for an ITCC is applicable only in specific scenarios. As per the existing provisions and instructions, only persons involved in serious financial irregularities or those with direct tax arrears exceeding Rs. 10 lakh (not suspended by any authority) need to obtain the ITCC. This regulation has been in force since 2003 and has not undergone any changes following the recent amendment.
The Central Board of Direct Taxes (CBDT) clarified that an ITCC is required only in specific cases:
Serious financial problems: If someone is involved in major financial problems and their presence is necessary for investigations.
Large unpaid taxes: If a person owes more than ₹10 lakh in taxes which are not withheld by any authority.
The notification further added that the process for obtaining an ITCC involves registering specific reasons and obtaining approval from the Principal Chief Commissioner of Revenue or the Principal Commissioner of Income Tax.
In summary, the CBDT emphasizes that obtaining an ITCC is not a general requirement for all Indian citizens traveling abroad, but is reserved for exceptional cases involving significant financial issues.
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