The Central Board of Direct Taxes (CBDT) has that not all Indian citizens require an income-tax clearance certificate (ITCC) before leaving the country.
Only individuals involved in serious financial irregularities require an ITCC and they must face an investigation when tax demands are likely to be raised.
In addition, individuals with direct tax arrears of INR1 million (USD11,927) or more, which have not been put on hold by any authority, also must obtain an ITCC before leaving India. In other cases, the principal chief commissioner or chief commissioner of income tax can require people to secure an ITCC.
The CBDT issued the clarification in response to the misinformation that all individuals who want to travel outside of India must obtain an ITCC. The CBDT has said this is incorrect. The clarification notes that the confusion arose due to misinterpretation of the recent amendment to the income tax laws regarding the ITCC.
In the clarification, such a requirement has always been a part of the law since 2003 and the recent amendment to the Finance (No. 2) Act, 2024, was to only include black money under the provision.
