What is Tax Clearance Certificate and when foreigners need to submit it? - Professionals - Taxation - TIK Share
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What is Tax Clearance Certificate and when foreigners need to submit it?


Rahul Rai

2014-02-26

A foreign person when visits India for Business, profession or employment need to submit Tax clearance certificate.

What are the requirements?

When one need to submit Tax clearance certificate?

What is the procedure to get tax clearance certificate?

CA Pulkit Sharma

2014-02-26

Tax clearance certificate is to be obtained by persons leaving India. They have to produce the certificate before departure to get clearance.

When a person is not domiciled (permanant home) in India (Section 230(1))

Section 230 (1) is applicable if the following conditions are satisfied:

  1. The person is not domiciled in India.
  2. He has come in India in connection with business, profession or employment.
  3. He has income which is generated from any source in India.

In case the person falls in above creteria than No objection certificate shall be issued as follows:

Undertaking from employer/payer of Income: If the aforesaid conditions are satisfied, the concerned person shall not leave India by land, sea or air unless he furnishes an undertaking as follows-

  1. The undertaking should be in form no. 30A from his employer or through whom such person is in receipt of the income ; and
  2. Such undertaking should be to the effect that tax payable by such person shall be paid by the employer or the person through whom any income is received.

No Objection Certificate: If person submits the undertaking to the prescribed authority (ccit or DG who  has the juridiction over the person not domiciled in India or other authority by ccit/DG) satisfying the above conditions, the prescribed authority shall on receipt of the undertaking, immediately give to such person a no objection certificate in form 30B, for leaving India.

A copy of form no. 30A and 30B should be forwarded to CCIT or DG having juridiction over employer/payer.

Exceptions:

  1. If a person who is not domiciled in India but visits india as a foreign tourist or for any other purpose not concerned with business, profession or employment.
  2. If the case is covered by such exceptions as the central government may, by notification in the official gazette, specify in this behalf.

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