Filing ITR? Residents of this Indian state can earn crores without paying income tax

While the rest of India gears up for ITR filing, Sikkim remains unique. Eligible natives pay zero income tax, even on earnings in crores, thanks to a constitutional safeguard.

This exemption is not a loophole--it’s a legal right. Article 371(F) of the Constitution and Section 10(26AAA) of the Income Tax Act protect Sikkimese natives from central taxation, ensuring their income remains entirely tax-free.

The tax-free status traces back to 1975, when Sikkim merged with India. As part of the merger agreement, Sikkim’s pre-existing tax laws were preserved, safeguarding natives from central income tax.

Only those listed under the Sikkim Subjects Regulation, 1961 are eligible. These are natives recorded before the merger. Migrants and later residents do not enjoy this privilege.

Qualified individuals enjoy complete exemption--from salary and business profits to capital gains and investments. This makes Sikkim the only state in India where one can legally earn crores 

This provision explicitly states that income earned by eligible Sikkimese residents, including salaries, business earnings, and financial investments, is not taxable under central laws.

Sikkim’s protected status under the Constitution ensures that natives meeting eligibility criteria remain outside the central income tax structure.

Eligible residents enjoy full financial freedom, higher disposable income, and greater savings, giving them unique economic advantages compared to the rest of India.

Across India, certain incomes are already exempt, including agricultural income, scholarships, NRE account interest, partnership profits, and HUF distributions, but none provide the comprehensive exemption seen in Sikkim.

With its permanent income tax exemption for native residents, Sikkim occupies a unique position in India’s financial and constitutional framework, distinguishing it from all other states in the country.