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  • Category: Tax Planning

    Taxable income for northeastern region of India


    Have a query about the taxes to be paid by north eastern tribes? Looking out for this information? Here, on this page check out the responses from experts to your query.

    Why northeastern scheduled tribes are exempted from taxable income centrally?
    What are the taxes levied on the scheduled tribes of northeastern region of India?
    Is agricultural income and non- agricultural income taxable for scheduled tribes of northeast?
  • #146761
    As per Sec 10(26) in the case of members of schedule tribe, residing in an area of North Eastern states, any income which accrues or arises a) from any source in these areas b) by way dividend or interest on securities from all over India does not form part of total income.
    The person should produce the test of residence in the specified areas for the benefit of the exemption.
    The persons who employed within the NE states if their total income was below taxable limit or nil,they did not require PAN.

    drrao
    always confident

  • #146763
    The basic reason is to give the people in the backward regions and communities financial concessions to enable them to lead better lives.

    Any member belonging to a Schedule Tribe (under Article 366(25) of the Indian Constitution) who resides in the territory of Mizoram,Arunachal Pradesh,Nagaland,Manipur,Tripura and areas of Mikir,Kahsi,Jaintia,Garo,North Chachar Hills under the Section 10(26) of Income Tax act of 1961 is exempted from tax with regards to earnings from any source and income by the way of dividend or interest from securities. This would apply to a Government servants income provided the place of work and his residence is located in the above regions.

    He or she has to fulfill the criteria of scheduled tribe, residence ( once they move for any reason, including transfer, the exemption is lost)

    This exemption has been misused by some to convert their unaccounted earnings via the members of these regions.
    Please check these sites too.
    1.http://www.mdoner.gov.in/content/tax-concession-ner-including-direct-tax. TAX IN NE STATES
    2.http://www.mdoner.gov.in/sites/default/files/silo4_content/Special%20provision/Section%2010%20%2826%29.pdf. WHAT IS MEANT BY TOTAL INCOME

  • #146776
    There is a special exemption for the schedule tribes belonging to certain parts of Northeast (Arunachal Pradesh, Mizoram, Nagaland, Manipur,Tripura and some areas of North Chachar Hills in Assam) in respect to income tax on their earnings.

    This exemption is available under section 10 (26) of income tax and is applicable to those schedule tribes who have a permanent residence and are residing in those specified areas.

    Whatever they are earning by way of agriculture or their job or investment in share markets/ banks/ other instruments in India is not taxable.

    Knowledge is power.

  • #146778
    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.

    Regards,
    Tulika Devi Nath


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