IMPORTANT ANNOUNCEMENT- INCOME TAX

INSTRUCTION NO 8/2008, Dated: July 29, 2008ORDER UNDER SECTION 119(2)(a) OF THE INCOME TAX ACT, 1961Vide Finance Act, 2008, a new clause (26AAA) has been inserted in section 10 of the Income Tax Act, 1961 ('Act') with retrospective effect from assessment year 1990-91. Under the said clause, the following income accruing or arising to a Sikkimese individual is exempt from tax-(a) income from any source in the State of Sikkim; or(b) income by way of dividend or interest on securities.For the purposes of the clause, "Sikkimese" has been defined in the Explanation thereto. 2.Income accruing or arising to a non-Sikkimese individual residing in the State of Sikkim continues to be liable to tax under the Act. In the case of such individuals, it has been decided that-(a) For assessment year 2007-08 or any preceding assessment year, no assessment or reassessment shall be made with regard to the income-(i) income from any source in the State of Sikkim; or(ii) income by way of dividend or interest on securities.(b) In case any proceedings have been initiated for assessment year 2007-08 or any preceding assessment year for not filing the return of income, such proceedings shall be dropped.(c) In case any assessment or reassessment proceeding has been initiated for assessment year 2007-08 or any preceding assessment year and assessment orders have not been passed, the aforesaid income shall be accepted as per the return.(d) For the assessment year 2008-09 and subsequent assessment years, assessment or re-assessment, if required, shall be made in accordance with the provisions of the Income Tax Act, 1961. 3. These instructions shall apply only to non-Sikkimese individuals residing in the State of Sikkim.F.No.153/19/2007-TPL(Vandana Ramachandran) Under Secretary to the Govt. of India