Rule 228 — Forms and certificates for the purposes of section 420. Made under s.420 of the Income-tax Act, 2025.
Rule 228 gives effect to Section 420 of the Income-tax Act, 2025. A rule cannot go beyond the section it serves: where the two seem to differ, the section governs.
The rule prescribes the six documents used under section 420. Sub-rule (1) requires the undertaking to be furnished to the prescribed authority by a person not domiciled in India, from the persons referred to in clause (i) or (ii) of the longline in section 420(1), to be in Form No. 154. Sub-rule (2) requires the no-objection certificate issued by the prescribed authority under section 420(1) to be in Form No. 155, valid for the period mentioned in it. Sub-rule (3) requires the information to be furnished by a person domiciled in India to be in Form No. 156.
Sub-rule (4) requires every application under section 420(4) to be made in Form No. 157, and sub-rule (5) provides that every application under section 420(5) may be made in Form No. 158. Sub-rule (6) requires a tax clearance certificate issued under section 420(5) to be in Form No. 159, valid for the period mentioned in it.
Sub-rule (7) requires a copy of the undertaking referred to in sub-rule (1) and of the no-objection certificate referred to in sub-rule (2) to be forwarded to the Chief Commissioner of Income-tax or Director General of Income-tax, as the case may be, having jurisdiction over the persons referred to in section 420(1).
Section 420 conditions departure from India on undertakings, information and, in some cases, a clearance, but leaves the paperwork unstated. The rule names a form for each step and separates them clearly: what a person not domiciled in India must have undertaken for him, what a person domiciled in India must supply, what is applied for and what is issued. Sub-rule (7) then makes sure the jurisdictional authority learns of the undertaking and the certificate rather than only the issuing authority holding them.
The forms are not interchangeable and they split on domicile: Form No. 154 and the no-objection certificate in Form No. 155 belong to the case of a person not domiciled in India, while Form No. 156 is the route for a person domiciled in India. Note also the difference in wording between sub-rules (4) and (5) — an application under section 420(4) shall be made in Form No. 157, whereas an application under section 420(5) may be made in Form No. 158. Both certificates the rule prescribes, Form No. 155 and Form No. 159, are valid only for the period mentioned in them, so neither is a standing clearance and the period on the face of the document governs. The undertaking is given by the persons in clause (i) or (ii) of the longline in section 420(1), not by the departing person himself, and by sub-rule (7) a copy of it and of the no-objection certificate travels to the Chief Commissioner or Director General having jurisdiction.
A company employing a person not domiciled in India furnishes an undertaking in Form No. 154 to the prescribed authority, which issues a no-objection certificate in Form No. 155 valid for the period stated in it. Copies of both are forwarded to the Chief Commissioner of Income-tax having jurisdiction under sub-rule (7). An employee domiciled in India in the same situation would instead furnish information in Form No. 156.
A reader meets this rule at the point of departure from India under section 420, in the undertaking or information furnished before travel and in the no-objection certificate or tax clearance certificate produced, each valid only for the period it states.
A no-objection certificate to be issued by the prescribed authority under section 420(1) shall be in Form No. 155 and shall be valid for the period mentioned therein.
A tax clearance certificate issued under section 420(5) shall be in Form No. 159 and shall be valid for the period mentioned therein.
