There is a state in India where not even ₹ 1 income tax is deducted on earnings, do you know its name?

Every common man living in India, whose income is above a certain limit, has to pay income tax to the government. Every year when the budget comes in February, the eyes of the middle class are fixed only on the fact that this time they might get some tax relief. But would you believe if we say that there is a place in our country where people do not have to pay even a single penny of tax to the government on their earnings?

You might be shocked to hear this, but it is absolutely true. Beautiful North Eastern States of India Sikkim The natives living in India have complete freedom from income tax. Sikkim is the only state in the country where this special rule is applicable. But why is this so? There is an interesting history and strong legal reason behind this.

Why has Sikkim got this special exemption?

This exemption given to Sikkim is not a recent thing. In fact, before becoming a part of India in 1975, Sikkim was an independent princely state for about 330 years. When it merged with India in 1975 and became the 22nd state of the country, a special agreement was made. The only condition of this merger was that no changes would be made in the old tax system and rules of Sikkim.

Keeping this historical promise, the Indian Income Tax Act was Section 10 (26AAA) Under this, the natives of Sikkim have been kept out of tax. This is the reason that even today the people there are able to keep all their hard earned money with themselves.

Who gets the benefit of this ‘zero tax’ rule?

Not everyone gets the benefit of this special status given to Sikkim under the Constitution. According to the rules implemented in the year 2008, this relief is given only to the native residents of Sikkim. This includes those people whose names are recorded in the old records of Sikkim or whose ancestors were permanent residents there before 26 April 1975 (the date of merger with India). These people do not have to pay any tax on the interest they receive from their salary, business or bank.

Which people have to pay tax?

Now you must be wondering whether every person who settles there will get this benefit? So the answer is no. This rule does not apply to those people who are working or settled in Sikkim after coming from other states. If you go from Delhi or UP and work in Sikkim, you will have to pay tax as per general Indian rules. Also, if a native of Sikkim goes out of the state and earns money in another state, he has to pay tax on that income.

Although this special exemption is often debated in other parts of the country, the people of Sikkim consider it an important part of preserving their historical heritage and culture.