CMA Intermediate · Direct and Indirect Taxation · PAN
Ramesh Iyer is domiciled in India and is leaving for a holiday abroad. No Permanent Account Number has been allotted to him because his total income is not chargeable to income-tax. What must he do under the tax clearance provisions of the Income-tax Act, 2025?
Where a person domiciled in India has no PAN allotted, has income not chargeable to tax, or is not required to obtain a PAN, he must furnish a certificate in the prescribed form at departure. The employer undertaking applies only to non-domiciled persons in India for business or employment.
- AObtain a PAN immediately at the airport, otherwise he cannot leave India
- BFurnish a certificate in the prescribed formCorrect
- CFurnish an undertaking from his employer to pay his tax
- DObtain a no-liability certificate from the Principal Chief Commissioner in every such case
Explanation
Section 420(4) says that where no PAN has been allotted to a person referred to in sub-section (3), or his total income is not chargeable to tax, or he is not required to obtain a PAN, he must furnish a certificate in the prescribed form. The employer undertaking in option C applies to non-domiciled persons who came to India for business, profession or employment.
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