No Income Tax, No PAN Card; This Is That State In India

Taxation by the people is important for the smooth functioning of the government in any country. But residents of a state in India are exempted from paying income tax.

The original residents of the state of Sikkim in India are exempted from paying income tax. This is under Section 10 (26AAA) of the Income Tax Act, 1961.

Sikkim was once a place of royal rule. Some proposals were put forward before the merger in India. According to this the old law in Sikkim is still followed. And the state has a special status. This is guaranteed under Article 37(f) of the Constitution of India. Sikkim has its own unique taxation systems. These rules were framed in 1948. These have been followed since 1975.

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This state is also exempted from the requirement of requiring a PAN card. Sebi has already implemented a rule that people of Sikkim do not need PAN card to invest in Indian stock market and mutual funds.

Association of Old Settlers of Sikkim had filed a petition in Su court in 2013. This was related to the issue of exempting those settled in Sikkim before 1975 from income tax. Following this, the Supreme Court directed the state to amend Section 10(26AAA) of the Act. The proposal was to expand the clause related to the Income Tax Act. It was meant to include all Indians whose primary residence was in Sikkim before 26 April 1975.

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