Summary: Starting October 1, 2024, the Indian government will require a tax clearance certificate (TCC) for certain individuals traveling abroad. This certificate is mandatory for those involved in serious financial irregularities or with direct tax arrears exceeding ₹10 lakh that have not been stayed by any authority. The TCC ensures compliance with tax laws and confirms that an individual has settled all income tax obligations before leaving the country. The application for the TCC can be made through the Income Tax Department’s online portal by submitting necessary documents like PAN, passport, and proof of travel plans, along with paying a nominal application fee. The TCC will be sent to the applicant’s registered email or can be downloaded from the portal. This new regulation emphasizes the importance of fulfilling tax responsibilities before traveling, with stricter compliance and penalties for non-compliance. The certificate will be required to be presented when asked by airlines or immigration authorities during travel.
Introduction
The New government laws need a tax clearing certificate from October 1, 2024. New tax clearance certificate involves ensuring compliance with tax obligations and prevent tax evasion by an individual before leaving the country. A tax clearance certificate will be issued by a tax authority to confirm that the individual has paid off all his income tax obligations and has complied with it.
Key points about new tax clearance certificates
1. Who needs the Tax Clearance Certificate – Only certain persons are required to obtain the said certificate. Tax clearance certificate may be required to be obtained by persons in following circumstances :
> Where the person is involved in serious financial irregularities and investigation of the case under the Income-tac Act is necessary.
> Where the person has direct tax arrears exceeding Rs. 10 lakh outstanding which have not been stayed by any authority.
2. Purpose –The whole crux of this certificate is to ensure compliance with tax laws. It would serve as an evidence that an individual or business entity has paid all dues taxes and there is nothing outstanding.
3. Application Process and Fee – Tax clearance certificates are typically applied for through a tax authority’s online portal. There maybe a normal fee for processing the TCC application.
4. Requirements to obtain certificate – Individual may need to meet certain certain criteria, such as income tax returns, necessary documentations such as PAN or Aadhaar card, passport and Visa copies.
5. Compliance and Penalties – With this new certificate, there will be stricter compliance requirements and non compliance penalties. Taxpayers would need to ensure that they are up-to-date with their fillings and payments to avoid fines or legal actions.
6. Validity and Renewals – Upon verifying or reviewing your submission and finding the provided documents satisfactory, the tax officer will issue the ITCC ( Income Tax Clearance Certificate) This documents will reflect details regarding the validity of ITCC, and ensuring that the taxpayer has fulfilled all tax obligations to date.
Guidence for obtaining tax clearence certificates
Step 1 : Check Eligibility – Ensure that you are required to obtain a TCC based on your travel plans and the current regulations.
Step 2 : Prepare documents –
PAN Card Issued by the Income Tax Department.
Passport – Valid passport with relevant travel details.
Proof of travel plans – Such as flight tickets and accommodation details.
Step 3 : Visit the Income Tax Departments Online portal, Navigate to the section for obtaining a Tax Clearance Certificate.
Step 4 : Fill out the Application Form –
– Complete the application form.
– Provide accurate and complete information as asked .
Step 5 : Submit supporting Documents :
– Uploading the required documents as mentioned.
– Ensure that all the documents are clear and legible.
Step 6 : Pay the Application Fee
– Pay nominal application fee through online payment gateway on the Income Tax Department’s portal.
– Save the payment receipt for your reference in future.
Step 7 : Submit the application –
– Review the application form and documents attached.
– Submit the application online.
Step 8 : Track the application Status
– Use the reference number generated at the time of submitting the application form to track the status of your application on the portal.
Step 9 : Receive the Tax Clearance Certificates –
– The certificate will be sent to your registered email address or you can download it from Income Tax Department’s portal.
Step 10 : Print and carry the certificate
– Carry the certificate while travelling with your travel documents.
– Present when asked by airlines or immigration authorities during the travel.
Conclusions
By requiring a tax clearance certificates or those traveling internationally, the government aims to ensure that all citizens fulfill their tax obligations before leaving this country.
For individuals planning to travel abroad, it is important to understand and comply with these new amendments. Ultimately, the new tax clearance certificate rule serve as a reminder of importance of tax compliance and contribute their fair share to the country’s development.
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Author: Suhani, Associate Consultant | For enquiries: [email protected] | Contact: +91 9122522387, +91 9819238879
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