|
Income Tax Clearance
Certificate
General
Where
an expatriate stays in India for a period or periods
exceeding in the aggregate 120 days or more, continuously,
Income-Tax clearance certificate is required to be obtained
from the tax authorities, under the provisions of the
Income Tax Act, 1961, before his departure from India.
Obligation is cast on the carrier, i.e. airline or shipowner,
to ensure, wherever applicable, income-tax clearance
certificate has been obtained by the concerned individual.
The Tax
Clearance Certificate is to be obtained from the Tax
Officer, before the expatriate or his family proceeds
out of India, vide Section 230 of the Income Tax Act,
read together with Rules 42, 43 and 44 of the Income
Tax Rules. These Rules prescribe the form of application
for such Certificate.
The Tax
Clearance Certificate as mentioned above is to be produced
for examination, before any Customs Officer, when requested
at the time of departure from India.
For obtaining
such certificate, generally the documents required to
be submitted, are the following :
- Application
in Form No. 31, prescribed by the Income Tax Rules,
1962, to be filed with the tax officer having jurisdiction
over the applicant as mentioned above, alongwith the
passport;
- A continuing
Guarantee from the employer or any other person who
is a tax payer in India, filing personal income tax
returns regularly, and having source of income or
assets in India to guarantee payment of all tax liabilities
as may arise in respect of such expatriate on demand
by the tax authorities;
- Evidence
of payment of taxes, or clarification regarding exemption,
if any, claimed. for example, in case taxation of
the expatriate is covered by any provision of the
Tax Treaty, whereby his income in India is exempt
for short stay upto 183 days in a financial year,
clarification regarding compliance with the conditions
prescribed therein;
- Tax
return of the concerned individual, in case the income
is to be subject to Indian Income Tax
- An affidavit
setting out the details of personal particulars specially
in respect of his stay in India;
In case
spouse / dependant of the expatriate is also departing
from India, then additionally, such spouse / dependant
of the individual is also required to obtain the Income
Tax Clearance Certificate, following the procedure outlined
above. However, in such case, an affidavit is also required,
in addition to the other documents as mentioned above,
from the husband / person on whom the individual is
dependant, giving the prescribed particulars alongwith
evidence of payment of tax, if any, by such individual
in India.
Clearance
Certificate for the Duration of Employment
As
per the Rules, a foreigner employed with an Indian concern,
or a foreign concern, which is assessed to tax in India
and has a fixed place of business in India, can obtain
Income Tax Clearance Certificate valid for entire contract
period in India. A one-time clearance would be granted
where such employer furnishes to the satisfaction of
tax authorities a guarantee in the prescribed form for
payment of tax, which may become due during the period
of contract of the foreigner and for an additional period
of two years thereafter. The guarantee may also cover
the tax liability of spouse and dependants of the employee,
who in such case would also be entitled to the benefit
of one-time clearance.
|
