Income tax free state: You may be surprised to learn that there is a state in India where people are not required to pay income tax. Even if the people there earn over Rs 1 crore, the government cannot recover even Rs 1 from them.

Income tax free state: exemption rule; details

Finance Minister Nirmala Sitharaman on February 1 has presented the budget for the fiscal year 2023-24. The government said that there would be no taxation on income up to Rs 7 lakh. Many people have affected with the announcement, but did you know that there is a state in India which never bother with the income tax slab change?

Where not a single rupee of income tax is collected from the general public. Yes, you read it correctly. Even if the people in Sikkim earn crores of rupees, the Income Tax Department does not collect a single rupee from them. Know in this article why this rule was implemented in Sikkim.

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Income tax free state: Why exemption granted?

For this, you must be familiar with Indian history, as India signed a peace treaty with Sikkim in 1950. Sikkim came under India’s protection. Then, around 1975, it was completely merged in India. Sikkim was under Chogyal rule. In 1948, the Sikkim Income Tax Manual was published.

In 1948, the then ruler of Sikkim issued the Sikkim Income Tax Manual, and when the state merged with India, he stipulated that Sikkimese citizens be exempt from income tax. It is noted that native Sikkim residents are exempt from paying income tax under Section 10 (26AAA) of the Income Tax Act.

Native Americans receive discount

The Income Tax Act provides for this exemption for Sikkim’s original residents. Let us inform you that the Supreme Court has issued a decision in this case. Since then, approximately 95% of the people of Sikkim have benefited from this exemption. Previously, this exemption was only available to those who held a Sikkim subject certificate.

371a Article

It is noted all of the Northeastern states have been granted special status under Article 371A. As a result, people from other parts of the country are unable to purchase property or land in this area. Section 10 (26AAA) of the Income Tax Act of 1961 exempts Sikkim residents from paying income tax.

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