THE OLD SETTLERS OF SIKKIM

SECTION 10(26AAA)
SIKKIM, INCOME FROM	[SEC. 10(26AAA)]

Exemption to Sikkimese individuals - Vide 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.

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 following 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.

These instructions shall apply only to non-Sikkimese individuals residing in the State of Sikkim - Instruction : No. 8/2008, dated 29-7-2008.