Definition of ‘Sikkimese’ amended by Finance Act 2023 is applicable only for Income-tax Act: CBDT

Press Release, dated 04-04-2023

The Central Board of Direct Taxes (CBDT) has issued a clarification with regard to the recent amendment made to the definition of “Sikkimese” under section 10(26AAA) by the Finance Act, 2023. The board has clarified that the term “Sikkimese” defined for the purposes of the said section, is only for the purposes of the Income-tax Act, 1961, and not for any other purpose.

Editorial note:

The erstwhile section 10(26AAA) did not exemption to a Sikkimese woman who married a non-Sikkimese individual and those individuals domiciled in Sikkim, but their name did not appear in the Register of Sikkim. The Supreme Court, in the case of Association of Old Settlers of Sikkim v. Union of India [2023] 146 taxmann.com 271 (SC) ended this discrimination and struck down the proviso to Section 10(26AAA) as being ultra vires Articles 14, 15 and 21 of the Constitution of India.

To settle the issue and incorporate the Apex Court ruling, the Finance Act 2023 substituted clause (26AAA) of Section 10 with retrospective effect from 01-04-1990 to modify the meaning of ‘Sikkimese’.

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