The tribal communities of North Eastern states are exempted from paying income tax in order to give them an economic boost. As mentioned in the section 10 (26) of Income Tax act, the tribes residing in the North Cachar Hills, Karbi Anglong, Bodoland Territorial Autonomous District in Assam, Jaintia Hills & Garo Hills in Meghalaya, Mikir Hills, Arunachal Pradesh, Manipur, Mizoram, Nagaland and Tripura are entitled to claim exemption from tax arising from any source of income in the areas or states aforesaid and income by the way of interest and dividend.
To avail the benefits of tax exemption the person has to be a member of the scheduled tribes as defined by the article 366 (25) of the constitution of India and should be residing in the specified region. Please note if the person is transferred or stops residing in such areas his eligibility of tax exemption also ends. Also according to a decision of the Guwahati High court it was announced that the income of a scheduled tribe member will be tax exempted even if doesn't originally belong to the specified region (covered under section 10 (26)) , however his income originates out of the region in which exemption is applicable. Thus the place from which the income originates is important in this case, besides falling into the category of the community.
All sorts of income, whether agricultural or non- agricultural is exempted for the tribal communities residing in the specified region.
Tulika Devi Nath