Income in crores of rupees and no income tax? It happens in this Indian state

• ​Sikkim residents benefit from complete income tax exemption, no matter how much they earn annually.
• This unique tax-free status is protected under Article 371(F) of the Indian Constitution and Section 10(26AAA) of the Income Tax Act, 1961.

• ​The tax exemption stems from the 1975 merger agreement with India, allowing Sikkim to retain its historical laws and special privileges.
• Sikkimese citizens continue to enjoy financial advantages due to this agreement.

• Article 371(F): Grants Sikkim a distinct legal status, exempting its residents from paying income tax.
• Section 10(26AAA): Specifies that the income of Sikkimese residents, including interest from securities and dividends, is tax-free.

• ​Most Indian citizens must file income tax if their income exceeds a certain threshold.
• Sikkim is the exception where even high earners, making crores, are fully exempt from income tax.

• ​Sikkim’s tax-free status enhances financial well-being for its residents, promoting local investments and economic activities.
• It also makes the state attractive for external investments, boosting overall economic growth.

• ​Agricultural Income: Exempt to support farmers.
• Partnership Firms: Taxed at the firm level, but partners receive post-tax profits.
• Hindu Undivided Families (HUF): Taxed as a single unit, exempting individual members from additional tax.
• NRE Accounts: Interest earned is tax-free for non-resident Indians.
• Scholarships: Exempt from income tax.

Taxed at the firm level, but partners receive post-tax profits.

Taxed as a single unit, exempting individual members from additional tax.

Interest earned is tax-free for non-resident Indians.

Exempt from income tax.

• ​Sikkim stands out as the only Indian state offering tax-free income, creating a rare financial advantage for its residents.
• This unique status helps the state foster a thriving economy, supported by historical agreements and a favorable legal framework.