Exemption from payment of income tax under section 10(26) of it act, 1961
Amar Tigga
(Querist) 17 January 2015
This query is : Resolved
. 1. I am a employed in a CPSU belongs to a member of Schedule Tribe under Article 366(25) of the constitution from state of the Bihar. I was appointed against direct recruitment on all India basis as a person belonging to Schedule Tribe. following directives of Central Government regarding reservation and age relaxation for Scheduled Castes, Schedule Tribes, Ex-Servicemen and other Categories, if any, issued from time to time. Accordingly, at the relevant time, the reservation benefit was being extended to all the candidates belonging to respective communities on the production of valid certificates of castes issued by the State of origin. Presently my Place of work and posting is situated in the specified tribal area i.e. Shillong..
2. Section 10(26) of Income Tax Act, 1961 A member of Schedule Tribe [Aritcle 366(25) of the Constitution], residing in any area in the State of Nagaland, Manipur and Tripura, Arunachal Pradesh, Mizoram and districts of North Cachar Hills, Mikir Hills, Khasi Hills, Jaintia Hills and Garo Hills is entitled to claim exemption from tax in respect of income from any source arising therein and income by way of dividend or interest on securities.
3. The clarification contained in the CBDT Circular letter No. NO. SCA/1/65-66/22306, dated 27-8-1968 pertaining to Section 10(26) of the Income Tax Act, 1961 is as follows:
The matter has been examined in consultation with the Ministry of Law. The position is that the source of income of the Government servant is at the place where the services are rendered. The place should be located in the tribal area in order that the employee may be eligible for exemption under section 10(26) of the Income-tax Act, 1961. If the Government servant has his office or place of work in an excluded area but resides in a tribal area, that will not entitle him to the said exemption. On the other hand, if the place of work and posting is situated in the specified tribal area, mere temporary residence outside the tribal area will not disentitle the person concerned from the exemption under section 10(26) of the Income-tax Act, 1961. The effect of the Supreme Court decision in the case of Lawrence Singh Ingty [1968] 68 ITR 272, is that for the purpose of considering the exemption available under section 10(26), the section would have to be read as if the words ’who is not in the service of the Government’ do not find a place therein. Consequently, Government servants will be entitled to the exemption only if they are otherwise eligible for the exemption.
The case pending with you may be disposed of accordingly.
4. The clarification obtained in the Government of India, Department of Telecom Letter No. 1-13/92-SCT dated 18/31.8.1992 from the Ministry of Welfare and Ministry of Home Affairs, Department of Personnel and Training is as under: It is clarified that All Scheduled Castes and Scheduled Tribes are treated alike for jobs in the Central Government. In view of this clarification, SC/ST persons employed in Central Government services in the State/Union Territories are entitled to get the benefits admissible to them. The same has again been reiterated in the Order Dtd. 27/11/2003 of Hon ble Supreme Court in the case No.:Appeal (civil) 4684 of 2001 of Chandigarh Administration And ... vs Surinder Kumar wherein letter Dtd. 26.08.86 addressed by the Government of India to the Home Secretary, Chandigarh Administration clarified that in respect of employment under the Central government there is no discrimination between Scheduled Castes and the Scheduled Tribes of one State or another. In respect of employment under the Union Territories also legally, the position would be the same and Order Dtd. 11/02/2005 of Hon ble Supreme Court in the case No.:Appeal (civil) 6-7 of 1998 of S. Pushpa And Others vs Sivachanmugavelu And Others, wherein, A D.O letter was sent by the Joint Secretary, Government of India, Ministry of Home Affairs, to the Lt. Governor of Pondicherry on 4.2.1974 clarifies as under:
" So far as reservations for SCs/STs candidates in posts/services under the Central Govt. are concerned, the concession is admissible to all SCs and STs which have been recognized as such under the orders issued from time to time irrespective of the State/ Union Territory in relation to which particular castes or tribes have been recognized as SCs/Tribes.
5. However, Income Tax department, Shillong, Meghalaya is not issuing the Certificate under 197(1) of the Income Tax Act, 1961 for non-deduction of tax [exemption certificate] to the under-mentioned on the plea that my tribe is not recognized in the State of Meghalaya, whereas schedule tribes who are recognized in the State of Meghalaya and similarly employed in my CPSU are getting the Certificate under 197(1) of the Income Tax Act, 1961 for non-deduction of tax [exemption certificate].
6. In view of above, I seek the clarification as to whether STs not recognized in the State of Meghalaya presently serving in the State of Meghalaya are exempted from the payment of income tax or not.
Anirudh
(Expert) 17 January 2015
You are entitled for the exemption.
In spite of availability of intructions, if someone is not granting the exemption, you have to fight it out legally.
In the given circumstances, you have to litigate by filing writ petition. This is mainly because the order passed under Sec. 197 is not an appeallable order, therefore you have to file only writ to get appropriate directions from the court.
Otherwise, if such exemption is not being granted under Sec. 197, you have to first pay the tax and then claim refund, by filing the return.
Rajendra K Goyal
(Expert) 17 January 2015
Agree with the advise of expert Anirudh.
Guest
(Expert) 17 January 2015
Dear Author ,You could get replies and Proper solution from Professional Chartered Accountants by posting this Query in CA Club India Forum of this same Club whose web site details available just below this Thread .
dr g balakrishnan
(Expert) 27 July 2016
Actually, after formation of states under reorganisation of states, 1951 or so, there are state lists, concurrent and union lists, per constitution, india being a multi caste multi lingual country, classification of castes are just dependent upon the locations the states are situated. In the circumstances, what is considered in one place s a particular caste, in the other state need not necessarily the same, so the idea of scrutiny committees surfaced in the case of backward classes, so too in the case SCs/STs, that way election commission is to go by the scrutiny committees findings, if it rejects a particular caste as ST/SC naturally the election can be set aside is another law.
so you will observe today it is a maze of confusions.
therefore the stand taken at Mizoram is a base of care, unless the scrutiny committee in the state of Mizoram certifies you are a SC or ST as per Mizoram, you might not get relief from the taxman.
you know all exemptions are just some maze of words.
My considered view is better you send a copy of your caste certification believe it was certified by your state on that basis you could have got that benefit , to the Mizoram scrutiny committee for appropriate certification, if once certified naturally your taxman would just accept the scrutiny committee certification and grant you the necessary exemption. thanks n regds.
Guest
(Expert) 27 July 2016
Since the CBDT Circular letter No. NO. SCA/1/65-66/22306, dated 27-8-1968 or the present day section 10(26) does not contain the name of Meghalaya, you may please like to refer to Part I or Part II of the Table appended to paragraph 20 of the Sixth Schedule to the Constitution for more clarity on your problem.
dr g balakrishnan
(Expert) 27 July 2016
Even if the schedule does not contain scrutiny certificate if issued by Megalaya committee, you can safely go ahead.
dr g balakrishnan
(Expert) 27 July 2016
Even if the schedule does not contain scrutiny certificate if issued by Megalaya committee, you can safely go ahead.tax man perforce has to accept.
