The CBDT clarified that the ITCC was not mandatory for all travelers. It applied only in rare cases involving serious financial issues or pending tax dues exceeding Rs 10 lakh, correcting widespread misinformation.
Kashish Bhardwaj | Apr 20, 2026 |
Income Tax Clearance Certificate Not Mandatory for All Indian Travelers; CBDT Clears Confusion
The CBDT has clarified that the news that it has been made mandatory for all Indian citizens to obtain an Income-Tax Clearance Certificate (ITCC) before leaving the country is a false statement. The department has said that such information is not based on facts under Section 230(1A) of the Income Tax Act, 1961. There is a provision to obtain a tax clearance certificate only in certain special circumstances. This provision came into effect from June 1 2003, through the Finance Act, 2003, and is currently in force in the same form.
Recently, only one amendment has been made to this section by the Finance (No. 2) Act, 2024, under which the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, has been inserted in the said Section. The sole purpose of this amendment is to cover the liabilities under this Act in the same way as liabilities are covered under other direct tax laws.
CBDT has also clarified that due to misinterpretation of this amendment, the misconception has spread that it is mandatory for all persons to take ITCC, whereas the reality is that no such provision has been made.
CBDT’s Instruction No. As per 1/2004 dated February 5, 2004, ITCC may be required only for those persons in whose cases special circumstances exist. These include persons who are involved in serious financial irregularities and whose presence is necessary for investigation, or who have direct tax dues of more than Rs 10 lakh and whose dues have not been deferred by any competent authority.
Additionally, a person may be required to obtain an ITCC only if proper reasons are recorded for the same, and prior approval of the principal chief commissioner of income tax or the chief commissioner of income tax is obtained. Therefore, it is again clarified that ITCC under Section 230(1A) of the Income Tax Act is required only in limited and special cases, and it is not mandatory for ordinary citizens to obtain it before leaving the country.
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