Income Tax Exemption to Resident of Ladakh in Jammu and Kashmir of India
Under the new Income-tax Act, 2025, the exemption previously covered under the old Section 10(26) of the Income tax Act (along with similar exemptions for Scheduled Tribes in specified areas) has been reorganized and is now located in Section 11 read with Schedule III (Table: Sl. No. 19).
Here is how the exemption for Ladakh is structured in the new Act:
- Applicable Section & Schedule: The exemption is governed by Section 11, which points to Schedule III (Income Not to be Included in Total Income of Eligible Persons).
- Eligible Person: The exemption is available to a member of a Scheduled Tribe (as defined in Article 366(25) of the Constitution) who is residing in the Union territory of Ladakh (along with other specified North-Eastern states and areas).
- Income Exempted: For such eligible residents of Ladakh, the Act exempts any income which accrues or arises from any source within Ladakh (or other specified areas), as well as any income by way of dividend or interest on securities.
Question : Person is residing in Ladakh but not member of Scheduled Tribe whether can can claim Income Tax exemption ?
Answer
No, a person residing in Ladakh who is not a member of a Scheduled Tribe cannot claim this specific income tax exemption.
The exemption for income accruing or arising in the Union territory of Ladakh (as well as income from dividends or interest on securities) is explicitly restricted to eligible persons who are members of a Scheduled Tribe as defined in Article 366(25) of the Constitution. Merely residing in Ladakh without holding Scheduled Tribe status does not qualify an individual for this exemption.
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Section 11 Income Tax Act 2025 INCOMES WHICH DO NOT FORM PART OF TOTAL INCOME
SCHEDULE III Income Tax Act 2025 INCOME NOT TO BE INCLUDED IN TOTAL INCOME OF ELIGIBLE PERSONS