Form 30B – Income Tax Department

Last Updated at: Sep 02, 2022
Form 30B

The era of globalization has led to Indians getting opportunities to work in all corners of the globe. Companies around the world care more about employing the right people with the required skill sets, and less about their nationality or place of residence. As a result, more and more Indians are going abroad for work-related matters. One of the most significant challenges businesses have to overcome nowadays is maintaining compliance with labour regulations and tax laws. Form 30B is one such compliance requirement that helps non-residents at the time of leaving India. It is advisable, and in some cases mandatory for individuals to obtain an income tax clearance certificate, better known as an ITCC. Let us now look at why the ITCC is useful, and how Form 30B helps the Income Tax Department issue such certificates. 

What is Form 30B for Income Tax Purposes?

Form 30A of the Income Tax Department helps individuals apply for an income tax clearance certificate or No-objection Certificate, which they will receive via Form 30B. This document issued by tax authorities helps in certifying that a particular individual leaving India has no tax dues within the country. It helps in proving that the individual has made all the required arrangements to discharge any tax liability they have or that may arise in the near future. 

As per Indian tax laws, a non-domicile who comes to India for a business or professional reason must obtain an ITCC before they leave. Similarly, non-domiciles, who after reaching India have generated or derived income from within the country must obtain an ITCC before leaving. Individuals may apply for an ITCC by filing a declaration via their employer. 

Do Indian Nationals Need to File Form 30B?

Indian nationals need to submit their PAN card and state their purpose and duration of stay when travelling abroad for deputation or secondment. Individuals will have to submit the above-mentioned details in a prescribed format via Form C before departure. Hence, Indian residents and nationals need not mandatorily obtain an ITCC, but will have to in the following situations;

  1. Involvement in financial irregularities 
  2. Presence is necessary for the investigation of financial irregularities 
  3. Has tax arrears worth over INR 10 lakhs 

Hence, non-domiciles may apply for an ITCC by submitting an undertaking via Form 30A. This form must be filed by either their employer or a person from whom they have received the said income, as declared in the undertaking. The person filing the undertaking in effect promises to handle all the tax dues that are payable after the non-domicile leaves India. Upon verification, the tax officials will issue an ITCC to the applicant via Form 30B.

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Eligibility Criteria for Form 30B

The individuals who meet the following criteria need to obtain an income tax clearance certificate via Form 30B at the time of leaving the country.

  1. Any individual who is not a domicile of India
  2. Further, any individual who came to India for business, employment or professional purposes
  3. Any individual who has generated or derived an income from India

Importance of Form 30B for Income Tax Purposes and Compliance

As mentioned above, obtaining an ITCC is mandatory in certain cases, and failure to do so could attract fines and penalties. In case you do not have a NOC, the tax authorities can direct immigration officers to stop you from leaving India by land, air, or sea. Additionally, non-compliance can also make it difficult for individuals to obtain an Indian visa for subsequent visits. Hence, all eligible candidates must ensure they obtain Form 30B from the Income-tax department to prevent such mishaps. Also, non-residents travelling to India for tourist purposes need not obtain an ITCC. 

Form 30B is required by individuals who come to India regarding a business, employment or professional matter. Similarly, only Indians leaving to go work outside India need to file Form 30C before departure. Section 195 of the Income Tax Act, 1961 deals with the tax levied by the government. It is on all non-residents who have earned an income from within the country. The ITCC helps in proving that an individual has cleared all their tax dues. And is free to leave India without any legal obligation. The certificate proves that the individual has no liabilities under the following Acts;

  • Income Tax Act, 1961
  • Wealth-tax Act, 1957
  • Gift-tax Act, 1958
  • Expenditure Tax Act, 1987

How to Obtain Form 30B

Here is a look at the ways in which an individual can obtain an income tax clearance certificate:

  1. Obtain an undertaking from your employer stating that you have no tax dues or liabilities in a pre-defined format.
  2. Collect an undertaking from the individual running the business that paid you in the prescribed format stating you have no legal obligations in India.
  3. Once you have the undertaking via Form 30A; download a copy of Form 30B and file it with the concerned tax authorities.

Documents Required for Form 30B

Applicants must submit the following details and documents along with Form 30A to obtain the ITCC in the form of Form 30B.

  1. Income tax returns
  2. Withholding tax certificate from the employer
  3. Form 30B affidavit of documents stating relevant details including passport number and bank details 
  4. Copy of passport 
  5. Copy of visa
  6. Certificate from employer on their official letterhead with details regarding tax deposited 
  7. Employment contract
  8. PAN card copy
  9. Copy of air ticket