Income Tax in Sikkim
Income from any source in the State of Sikkim, or income by way of dividend or interest on securities accruing or arising to a Sikkimese individual is exempt from tax. This was retrospectively exempted from 1990-91.
However income accruing or arising to a non-Sikkimese individual residing in the State of Sikkim continues to be liable to tax. In the case of such individuals, CBDT had decided that-
(a) For assessment year 2007-08 or any preceding assessment year, no assessment or reassessment shall be made with regard to –
(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.
These instructions shall apply only to non-Sikkimese individuals residing in the State of Sikkim.
CBDT Instruction No. 8/2008, Dated: July 29, 2008