Tax Free State Of India: People of all states in India have to pay tax, but there is also a state from where the government does not collect tax. Even if someone is a millionaire, he does not have to pay tax.

In India, paying income tax is the responsibility of every citizen falling in the tax slab. Every year whenever the Union Budget is presented, everyone's eyes are fixed on the fact that maybe this year the government will reduce the tax slab and give relief to the public. But it is not necessary that there should be a change in the tax slab every year and people should get relief. Because people falling under the tax ambit donate a fixed part of their income. But there is also a state in India from where the government does not collect any tax and it has been kept out of any tax slab. Let's know about that state.

Why tax is not collected from which state

Under Section 10 (26AAA) of the Indian Income Tax Act, the northeastern state of Sikkim is the only state in India that is tax free. Sikkim used to be a former princely state for more than 330 years, but it was merged with India in 1975. Due to this, it became the 22nd state of India. This merger took place on the condition that the old tax structure of Sikkim will continue even after merging with India. According to the tax rules of Sikkim, the citizens here do not have to pay any tax regardless of their income.

Exemption under the Indian Constitution

According to Section 10 (26AAA) of the Income Tax Act introduced in the year 2008, any person living in Sikkim or any person residing in the state is exempted from paying tax on any income from any source through income or interest. If a person who was a resident of Sikkim till 26 April 1975 is exempted from paying tax.

When this rule is not applicable

When someone migrates from another state and settles in Sikkim, then this exemption is not valid. If someone is a resident of Sikkim and he is earning in another state, then he will have to pay tax. This may be beneficial for the people of Sikkim, but it has been a matter of debate in other parts of the country. Some people also consider it against equality of taxation. On the other hand, those who are residents of Sikkim consider this exemption as their culture and political identity.