Only tax-free State in India: Even if one earns crores in a year here; Income Tax Department does not collect even single rupee
This is the only state in India where residents are exempt from paying income tax, regardless of their earnings. This unique status, rooted in the historical merger agreement of 1975 and protected under Article 371F of the Indian Constitution, provides significant financial relief and economic advantages to Sikkim's residents.
Sikkim is the only state in India where residents are exempt from income tax due to Article 371(F) of the Indian Constitution and Section 10(26AAA) of the Income Tax Act, 1961. This unique status, stemming from Sikkim's 1975 merger with India, provides significant financial relief to its residents.
Income Tax Rule

Income Tax Free State in India

The Tax-Free State

Historical Background

Legal Framework

Section 10(26AAA) Explained

Scope of Exemption

Implications

Broader Impact

Agricultural Income

Profit from Partnership Firm

Individual Share from HUF

Interest Income from NRE Accounts

Scholarships

Key Takeaway
