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July 29, 2008
Instruction No. 8/2008
Order under section 119(2)(a) of the
Income-tax Act, 1961
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.
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
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.
3. These instructions shall apply only to non-Sikkimese
individuals residing in the State of Sikkim.
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