1. Know why banned notes are flying off to north-east part of country

Know why banned notes are flying off to north-east part of country

Even as money being flown from Haryana to Nagaland looks like an unusual way of trying to convert black notes into white, it may not be illogical as the income tax department has allowed exemptions for few categories.

By: | New Delhi | Updated: November 24, 2016 12:51 PM
Among those who are exempted from paying tax are members of scheduled tribe communities in Manipur, Nagaland, Tripura, Mizoram and Arunachal Pradesh. Among those who are exempted from paying tax are members of scheduled tribe communities in Manipur, Nagaland, Tripura, Mizoram and Arunachal Pradesh.

Even as money being flown from Haryana to Nagaland looks like an unusual way of trying to convert black notes into white, it may not be illogical as the income tax department has allowed exemptions for few categories of incomes or individuals. Apparently, these exemptions are being misused.

Among those who are exempted from paying tax are members of scheduled tribe communities in Manipur, Nagaland, Tripura, Mizoram and Arunachal Pradesh. Also scheduled tribes in Mikir Hills and North Cachar Hills , the Khasi Hills, Garo Hills and Jaintia Hills in Meghalaya and Ladakh in Jammu & Kashmir are free from paying income tax. The exemption is given to income from any source in these areas or from dividends or interest on securities from anywhere, a ‘The times of India’ report has said.

A similar exemption is also available for those defined as “Sikkimese” in the Income Tax Act. This is for any income from the state itself and for income from dividend or interest on securities generated anywhere. The main aim behind these exception is to provide fiscal concessions to backward communities and areas.

Apart from these , there is also the exemption for the income in agricultural sector, which includes any revenue garnered from agricultural land. There are several institutions that are tax-exempt under the IT Act.

The report further said that it is also not difficult to see why the lawmakers would have decided not bring them under income tax slab. For example, income of a public charitable trust or not for profit society established for development of khadi and village industries is kept away from the tax. Same way, educational institutions including universities existing for educational purposes only and not for profit are exempt from paying tax on their incomes. under sections of the act.

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