At present, there is a round of filing income tax returns (ITR) across the country. People are paying income tax by calculating their earnings. But do you know that there is a state in India where people do not need to pay income tax? Yes, we are talking about Sikkim.
Why do the people of Sikkim do not have to pay tax?
Under Section 10 (26AAA) of the Income Tax Act, 1961, the original residents of Sikkim are exempted from income tax. In fact, in 1950, some conditions were fixed in the peace agreement between India and Sikkim. One of these conditions was that the people of Sikkim would never have to pay tax. This is the reason that when Sikkim became a part of India in 1975, this tax exemption rule also came into force.
Who gets the benefit of tax free?
Tax exemption is available only to those people who are considered “natives” of Sikkim.
There are two important things for this:-You should have a name in the Sikkim subject register or you are a descendant of someone whose name is recorded in this register.
This register was designed for the records of residents before 1950. Later in 1989, these people were considered citizens of India through citizenship amendment order. The Supreme Court also gave the status of “natives” of Sikkim to Indian citizens living in Sikkim till 26 April 1975. After this, about 95% of the population was exempted from paying tax.
Why no change was made in tax law?
Even though tax slab is replaced in the country every year or new tax rules are applicable, but the tax rules of Sikkim are still like that. Finance Minister Nirmala Sitharaman has also not changed the section related to the tax exemption of Sikkim so far. Its aim is to give relief to the local people and do not put tax burden on them.
