Tax clearance explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Section 420 sets up a tax check on certain people who leave India, and six forms carry it out. Four are filled by the person or the employer (Forms 154, 156, 157 and 158) and two are issued by the tax authority (Form 155 and Form 159). This is a run of six consecutive forms. This guide explains them as printed in the Income-tax Rules, 2026 (G.S.R. 198(E), notified on 20 March 2026), read with the amending notifications issued up to 22 September 2026.
Rule 228 assigns each form to a sub-section of section 420: Form No. 154 (undertaking, section 420(1)); Form No. 155 (no-objection certificate, issued, valid for the period mentioned in it); Form No. 156 (information from a person domiciled in India, section 420(3)); Form No. 157 (section 420(4)); Form No. 158 (application under section 420(5), "may" be made); Form No. 159 (tax clearance certificate, issued, valid for the period mentioned in it). The rule prints no time limit.
The section and the rule
Section 420 of the Income-tax Act, 2025 has two tracks.
A person not domiciled in India who has come to India in connection with business, profession or employment and has income from a source in India cannot leave India unless an undertaking from his employer, or from the person through whom he receives the income, is furnished to the prescribed authority, that the tax payable by him will be paid by that employer or person. The prescribed authority then immediately gives a no-objection certificate (sub-section (1)). A foreign tourist or anyone visiting for a purpose unconnected with business, profession or employment is outside it (sub-section (2)).
A person domiciled in India furnishes, at departure, the Permanent Account Number, the purpose of the visit abroad and the estimated period of stay (sub-section (3)); where no PAN has been allotted, total income is not chargeable, or no PAN is required, a certificate in the prescribed form (sub-section (4)). Where circumstances in the opinion of an income-tax authority make it necessary, such a person cannot leave unless he obtains a certificate that he has no liability under the Act and the other named enactments, or that satisfactory arrangements have been made for payment (sub-section (5)); the authority must record reasons and obtain prior approval of the Principal Chief Commissioner or Chief Commissioner (sub-section (6)). The owner or charterer of a ship or aircraft that carries such a person without checking the certificate may be personally liable (sub-sections (7) and (8)).
The section and its companions are in sections 420 to 422, and the rules in rules 227 to 229. Rule 228(7) says a copy of the undertaking and of the no-objection certificate is forwarded to the Chief Commissioner of Income-tax or Director General of Income-tax having jurisdiction over the persons in section 420(1). Rule 229 requires a person leaving India to produce the certificate to a Customs Officer on request.
If you are an expatriate, an employer of one, or a resident planning a long absence with open tax matters, our NRI tax filing team can help you prepare the correct form and papers.
Which form is for whom
| Form | Rule 228 | Filled by | What it is |
|---|---|---|---|
| 154 | sub-rule (1) | Employer (section 420(1)(i)) or the person through whom income is received (clause (ii)) | Undertaking to the prescribed authority |
| 155 | sub-rule (2) | Prescribed authority | No-objection certificate; valid for the period mentioned in it |
| 156 | sub-rule (3) | A person domiciled in India | Details under section 420(3) |
| 157 | sub-rule (4) | A person under section 420(4) | Certificate where no PAN, income not chargeable, or PAN not required |
| 158 | sub-rule (5) | A person domiciled in India who needs a certificate | Application under section 420(5) to the Assessing Officer |
| 159 | sub-rule (6) | Assessing Officer | Clearance certificate; valid for the period mentioned in it |
The forms filled by the person or employer
Form No. 154: undertaking
Addressed to the prescribed authority. In consideration of a no-objection certificate, the employer (or other person) undertakes to pay the Government of India the taxes which are or may become payable under the Act or under the Wealth-tax Act, 1957, the Gift-tax Act, 1958, the Income-tax Act, 1961, the Expenditure-tax Act, 1987 or the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, as the form prints them, on income earned during the employment or received from the employer by the person in Part B. The form also records that any amount certified by the Assessing Officer is accepted as conclusive evidence, that the undertaking is not affected by death, dissolution or liquidation, and that the Central Government may recover the tax in accordance with rule 225 without first exhausting legal proceedings against the assessee.
| Part | What it asks |
|---|---|
| A: Details of the Employer (rows 1 to 4) | Name, PAN, address, mobile number and email ID |
| B: Information of the Person Leaving India (rows 5 to 9) | Name, name of father or husband, PAN if available, passport or emergency certificate number with date, country and place of issue, contact details |
It is signed by the employer referred to in section 420(1)(i) or any other person in section 420(1)(ii).
Form No. 156: details by a person domiciled in India
Addressed to the prescribed authority. Rows 1 to 9 ask for name, name of father or husband, PAN, address, contact details, nature of business or profession in India, purpose of visit outside India, estimated period of stay outside India, and passport or emergency certificate details. A verification states that the information is true and correct to the signatory's knowledge, with no relevant fact concealed.
Form No. 157: certificate under section 420(4)
Rows 1 to 9 are the same as in Form No. 156. The person then certifies one of three things, striking out the rest: no PAN has been allotted under section 262 or under the 1961 Act (as the form prints, "as it existed prior to its repeal"); total income is not chargeable to tax; or the person is not required to obtain a PAN under the Act or the 1961 Act. A verification follows.
Form No. 158: application for the tax clearance certificate
Addressed to the Assessing Officer, requesting the certificate "in view of my departure from India as required under section 420(5)".
| Rows | What it asks |
|---|---|
| 1 to 8 | Name, name of father or husband, PAN, domicile, nationality, present and permanent address, contact details |
| 9 and 10 | Nature of business or profession in India; addresses of all places of business or profession |
| 11 | Previous visits outside India: date of arrival in India and period of stay outside |
| 12 to 16 | Purpose of the visit; date of departure and flight, ship or road journey details; whether exemption is claimed under any section (and which); destination; date of intended return |
| 17 | Passport or emergency certificate details |
The verification declares that the applicant has no liability under the Act and the other enactments the form names (with the 1961 Act, Gift-tax Act "as it existed prior to its repeal" as printed), or that satisfactory arrangements have been made for payment, and that the information is true and correct as far as the applicant knows, with no relevant fact concealed.
The forms issued by the authority
Form No. 155 (no-objection certificate) is a certificate under the DIN of the Government of India that the Income-tax Department has no objection to the person named leaving India by air, sea or land. Part A gives name, father or husband, PAN if applicable and passport details, and the certificate is valid for a journey or journeys commenced on or after one date and before another. It is issued by the prescribed authority.
Form No. 159 (clearance certificate) certifies that the applicant has no liabilities outstanding, or has made satisfactory arrangements for payment of taxes payable under the Act and the other enactments the form names. Part A gives the same personal and passport details, and it is valid for journeys commenced within the dates stated. It is signed and sealed by the Assessing Officer.
The other Acts named in these forms, including the repealed Acts, should be checked where relevant.
An example
Marcus Albrecht, a foreign national, has come to India on assignment and receives income through his employer, Nordic Instruments India Private Limited. Before he leaves, the employer signs Form No. 154 with Parts A and B filled; on receipt, the prescribed authority issues Form No. 155. Separately, Anita Rao, who is domiciled in India, is told by an income-tax authority that she needs a certificate before an extended stay abroad. She applies in Form No. 158 to the Assessing Officer, who may issue Form No. 159 valid for the stated journeys.
Need help with a tax clearance before leaving India?
The right form depends on whether the person is domiciled in India, whether the authority requires a certificate, and who gives the undertaking. Our NRI tax filing team can help you choose the form and prepare the particulars.
Key takeaways
- Forms 154 to 159 are the six forms for section 420; rule 228 matches each to a sub-section.
- Form No. 154 is the employer's undertaking for a person not domiciled in India; Form No. 155 is the no-objection certificate.
- Form No. 156 gives details under section 420(3); Form No. 157 certifies no PAN, no chargeable income, or no PAN required; Form No. 158 applies for a clearance certificate; Form No. 159 is that certificate.
- The certificates are valid for the period mentioned in them; the rule prints no time limit for the filings.
- The person leaving must produce the certificate to a Customs Officer on request (rule 229).
Read next
- Rules 227 to 229: tax clearance certificate and Forms 154 to 159
- Sections 420 to 422: tax clearance certificate and other recovery laws
- Form No. 162: annual statement of a liaison office of a non-resident
- Form No. 129: application to determine the taxable portion of a payment to a non-resident
Disclaimer: Based on the Income-tax Rules, 2026 (G.S.R. 198(E), notified on 20 March 2026), read with the amending notifications issued up to 22 September 2026, as consulted on 4 October 2026. It explains the words of the forms and rules only; later notifications, the forms and utilities on the e-filing portal, circulars and the way the tax authorities apply these provisions should be checked. This article is general information, not legal advice; check the official text before acting.