Tax Clearance Certificate

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1 year ago

1.What is Tax Clearance Certificate?

The certificate that is provided by the department of Inland Revenue to the taxpayer upon the request of the taxpayer on the basis of evidence of payment of all the tax payable up to certain period of time is known as tax clearance certificate.

2. What shall be done to get tax clearance certificate?

A person shall submit an application to the department for the certificate of payment of the entire tax payable by any certain date along with the documents of income returns as provided in sub section (2) of section 96.

Upon receipt of an application, the department inquires whether the computing of tax is correct or not and if the tax, fees, interest and withhold tax and interest is remain, such tax is levied, and the certificate of tax clearance is issued on the evidence of tax payment.

3. Is it compulsory to obtain tax clearance certificate?

The taxpayer may obtain tax clearance certificate as per their necessity.

4. Can the natural person with income from employment only obtain tax clearance certificate?

Yes, he/she can.

5. Can the natural person with the income from rent and interest obtain tax clearance certificate?

Yes, he/she can.

6. Can the natural person with the income from agriculture obtain tax clearance certificate?

Yes, he/she can.

7. Does the taxpayer have remaining tax liability after he/she obtain tax clearance certificate?

The tax clearance certificate is issued on the basis of the statement of the income returns and on the evidence of the payment of entire tax liability. If the inquiry or investigation of statement of income returns or any other means reveals additional income of the taxpayer than mentioned in the statement, the liability of the taxpayer to pay tax on such additional income remains.

8. What are the documents that are to be presented to obtain tax clearance certificate?

The documents that are to be presented to obtain tax clearance certificate are as follows:

  • An application stating all necessary information and post stamp of Rs 10 to be attached on it.
  • Statement of income returns where necessary and payment of such assessed tax
  • Statement of income returns of previous fiscal year and statement regarding payment of all taxes.
  • Financial statement and receipt of tax payment in case of the taxpayer requiring submission the financial statement.
  • Statement of income received from the employer and tax filings so made in relation to the individual having income from employment.
  • Other information as per required by the office.

9. Where can one file complaint if tax clearance certificate is not granted?

If the tax clearance certificate is not granted, compliant can be filed before the chief of the concerned office or Inland Revenue Department.

10. Fee shall be paid or not to obtain tax clearance certificate?

No fee shall be paid to obtain tax clearance certificate. However, no tax filings should remain unpaid.

11. Can the person who does not have any taxable income obtain tax clearance certificate?

The person not having income from any business, employment, investment or any taxable income can also obtain tax clearance certificate.

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