Did you know that India has one tax-free state? Do you know the name of that state? Keep an eye on today’s article. In India, people have to pay taxes every year. Especially those whose income falls under the income tax bracket must pay taxes by the end of July each year. Under the Income Tax Act of 1961, if there is a delay in paying income tax or if it is not paid, a notice comes from the income tax department.
With the help of taxes, the government can run the country well. Just think about how relieving it would be if you didn’t have to pay any tax on your income. There is one state in India where, even after earning millions, people are not taxed. The residents of this state are truly enjoying life. Let’s learn about this state where people are completely exempt from income tax.
In this state of India, no tax has to be paid
Sikkim is the only state in North East India where people have been given tax relief. The people here earn a lot and do not have to pay even a single rupee in tax. This means that all the earnings belong to the individual. In such a case, who wouldn’t want to live here?
Why was relief given to Sikkim in income tax?
You might be wondering why Sikkim was given relief in income tax. For this, you need to look at the history of Sikkim. In fact, Sikkim was an independent country before 1975. In 1975, it became a part of India, and a new state was formed. This was agreed upon in the 1950 India-Sikkim Agreement.
In this agreement, the king of Sikkim, Chogyal Tashi Namgyal, had set certain conditions. One of these conditions was that the residents of Sikkim would be exempt from income tax. This condition was accepted, and they began to receive income tax exemption under Section 10 (26AAA) of the Tax Act of 1961. Sikkim has been granted special status under Article 371F of the Constitution. However, at that time, only those people of Sikkim who had a Sikkim Subject Certificate were given tax exemption. As a result, 95 percent of the people of Sikkim came under the tax exemption category. This rule was changed after 1989, when, on the orders of the Supreme Court, those without a certificate were also granted exemption.
