Tax clearance certificate for NRIs

The following categories of persons are required to produce a tax clearance certificate from the concerned assessing officer prior to their departure:-

• persons who are not domiciled in India, and in whose case the stay in India has exceeded 120 days;
  
  
• persons of Indian or non-Indian domicile whose names have been communicated to the airlines/shipping Companies by the Income Tax authorities;
  
  
• persons who are domiciled in India at the time of their departure; but
  1. intend to leave India as emigrants; or
  2. intend to proceed to another country on a work permit with the object of taking any employment or other occupation in that country; or
  3. in respect of whom circumstances exist, which in the opinion of the income tax authorities render it necessary for him to obtain the Tax Clearance Certificate.

Such certificates is granted where there are no outstanding taxes under the Income Tax Act, the Excess Profits Tax Act, the Business Profits Tax Act, the Wealth Tax Act, the Expenditure Tax Act or the Gift Tax Act against him or where satisfactory arrangements have been made for the payment of any such taxes. Obtaining guarantee from the employer of the person leaving the country is one of the methods of ensuring satisfactory arrangement for payment of taxes. For those who have to go abroad frequently for employer's work, facility of one-time Clearance Certificate has been provided to the foreign employee who has a fixed tenure of service in India or upto 5 years on furnishing an employer's guarantee in the prescribed form for payment of any tax that may be found due against him during the entire period of contract plus two years.