PERSONS WHO REQUIRE THE TAX CLEARANCE CERTIFICATE BEFORE LEAVING INDIA

Income tax Clearance for leaving India is required by the following persons:-

1.who are not domiciled in India; or

2.who are domiciled in India at the time of departure but -

(a) intends to leave India as an Emigrant; or

(b) intends to leave India on a work permit for employment or occupation abroad; or

(c) in respect of whom Income Tax authority considers that a clearance certificate is necessary.

Normally, a person holding a foreign passport is not considered to be domiciled in India. Domicile of a person is different from his citizenship . Domicile is a place of habitation without any intention of leaving therefrom. The intention is to reside there forever . Thus, even a foreign national may be domiciled in India if he has a fixed residence and has the intention to reside forever in this country . Similarly, an Indian citizen may not be domiciled in India if he has no intention to reside forever in India.

The cases where Income Tax authority may consider that tax clearance certificate is necessary include cases of person, who according to information received, are likely to leave India for good and against whom there is a present or anticipated tax liability.

The anticipated liability refers to liability that may arise in respect of income on the date of departure. In such case the income tax authorities may communicate the name and address of the persons to all the Collectors of Customs and various airports and seaports with the request that the persons should be asked to produce a tax clearance certificate before his departure from India. A copy of the information is also sent to the person concerned for his information.

The collector of customs sends a copy of communication to the customs authorities at various air/sea ports of departure and asks them to require the person concerned to produce his tax clearance certificate when he arrives at the time of departure.

If the clearance certificate is not produced, the custom authorities send the copy of the communication received by them to the Officer-in-Charge of the ship or aircraft by which the concerned person is likely to travel.

The carrier will then insist on the clearance certificate. The owner or charterer of ship or aircraft carrying the person is likely to be treated as an assessee in default in respect of the tax payable of such person if he or she is allowed by them to leave India. Furthermore the tax due is recovered from the assessee in default.