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Sikkim’s special income tax exemptions have garnered significant attention. This northeastern state offers tax benefits not available to residents of other states, drawing widespread interest on social media.
Social Media Reactions:
- A user on X (formerly Twitter) joked, “Forget Dubai! Someone get me a resident status for Sikkim. Kitne mai milega bhai?”
- Another post read, “Pay zero tax… yes, you read it right!! Become a Sikkim resident.”
Background: Sikkim’s tax exemptions are rooted in its historical merger with India in 1975. Despite the repeal of the Sikkim Income Tax Manual of 1948 in 2008, Section 10 (26AAA) of the Income Tax Act has maintained tax exemptions for residents of Sikkim.
Key Benefits:
Income Tax Exemption: Residents are exempt from income tax on earnings within Sikkim, including interest on securities and dividends.
Conditions to Note:
- Location of Earnings: The exemption applies only to income earned within Sikkim. Earnings from outside the state are not exempt.
- Marital Status: A Sikkimese woman loses her tax-exempt status if she marries a non-Sikkimese man, as affirmed by the Supreme Court in 2008.
Additional Privileges: - Residents of Sikkim also benefit from a SEBI regulation that exempts them from the mandatory PAN requirement for investing in Indian securities and mutual funds.
