Income-tax Clearance Certificate requirement abolished; tenders and registrations no longer need it and PAN must be quoted.
The Department has abolished the requirement to furnish an Income-tax Clearance Certificate for filing tenders, obtaining commercial contracts, and for registration or renewal of contractor registrations and licences; ITCCs will not be issued for these purposes, and tenderers must quote their Permanent Account Number (PAN). All earlier circulars on this requirement are withdrawn.

Tax clearance requirement may be imposed for departing residents when financial irregularities or significant direct tax arrears risk revenue.
The amendment limits departing residents to furnishing PAN, purpose and estimated stay, but permits a tax clearance certificate in exceptional cases after Chief Commissioner approval where departure would prejudice revenue-notably for persons involved in serious financial irregularities or with substantial unstayed direct tax arrears-with the authorized Assessing Officer informing immigration authorities.

Permanent establishment attribution governs whether BPO activities in India generate taxable profits, depending on activity nature and arm's length pricing.
Where an IT enabled entity in India performs incidental functions (procurement of orders, concluding contracts, call centre services) for a non resident principal, the insignificant profit attributable to those functions may be treated as part of the permanent establishment's income in India if charges are at arm's length; no separate income accrues to the non resident apart from the PE income. If the Indian entity performs core revenue generating activities, substantial profits attributable to those activities are taxable in India in accordance with the relevant tax treaty and domestic law.