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This Indian State's Residents Need Not Pay Income Tax; Here's Why
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Sikkim Income Tax News: Sikkim’s status as a tax-free state dates back to 1975 when it merged with India. The merger included special provisions to retain the state’s existing laws and status. Initially, the state operated under its own tax regulations established in the Sikkim Income Tax Manual of 1948. However, in 2008, these local tax laws were repealed by the Union budget, leading to the introduction of Section 10 (26AAA) of the Income Tax Act, which provided tax exemptions for Sikkimese residents. Under this section, residents of Sikkim are exempted from paying income tax on their earnings, regardless of the amount. This exemption extends to income earned from interest on securities, dividends, and other sources, highlighting Sikkim's unique tax status in India.
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