Sikkim is the only state in India where eligible residents are exempt from paying income tax, thanks to special provisions under Article 371F of the Constitution and Section 10(26AAA) of the Income Tax Act, stemming from its 1975 merger. While not a city, this entire state provides tax-free status on income earned within its borders.
Sikkim remains India's only tax-free state, granting full income tax exemptions to its residents under Article 371(F) , Section 10(26AAA) of the Income Tax Act, 1961.
Why is Sikkim a tax-free state? Sikkim is a tax-free state due to its unique legal status following its merger with India in 1975. The Indian government exempted Sikkimese residents from income tax under Article 371F of the Indian Constitution and Section 10(26AAA) of the Income Tax Act.
Examples of income that are not taxable in India include agricultural income, gifts and inheritances, interest on EPF and PPF, scholarships and awards, life insurance proceeds, leave encashment, gratuity, Long-Term Capital Gains (LTCG), and interest on tax-free bonds.
States without sales taxes may have higher property or income taxes to generate revenue.
Anchorage, Alaska
Neither Anchorage nor Alaska levy an income tax, and Anchorage residents don't pay sales tax. Auto taxes are another bright spot, being among the lowest of any city. The result is an approximate 3.4% total tax burden.
Maximum marginal rate is the highest rate of tax at any income level. This means for those with incomes between Rs 2 crore and Rs 5 crore, 39% will be the highest applicable tax rate, and for those with incomes above Rs 5 crore, it will be 42.74% — the highest tax rate since 1992.
The Union Budget 2025 introduced a major income tax relief for the middle class – making annual incomes up to ₹12 lakh completely tax-free* under the new regime. This means if your taxable income is ₹12 lakh or less, you owe zero tax* for the year.
Any income which has a base source of agriculture is tax-free. Anything that you receive as 'inheritance' is tax-free. You are not liable to pay any taxes (for pushtaini jaydad). Under section 80E, Interest on education loan is also tax-free.
A person can obtain a domicile certificate on satisfying the following criteria of eligibility. The applicant should be a citizen of India. Any person who was born in Sikkim or had a permanent residence therein at least for fifteen years is eligible.
Eight U.S. states currently have no state income tax whatsoever: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming. Up until 2025, New Hampshire only taxed interest and dividend income.
Among the countries with the lowest tax rates in the world are Malta, Cyprus, Andorra, Montenegro and Singapore. Aside from zero income tax, in Antigua and Barbuda, individuals are also free from paying taxes on wealth, capital gains, and inheritance.
The Highest Individual Taxpayer – Mr Amitabh Bachchan
He got the No. 1 spot on this list by paying a huge amount of Rs. 120 crore as tax. The superstar earned an approximate amount of Rs350 crore in the financial year 2024-25 from various sources.
Members of a federally recognized Indian tribe are subject to federal income and employment tax and the provisions of the Internal Revenue Code (IRC), like other United States citizens. Determinations on taxability must be based on a review of the IRC, treaties and case law.
If you make ₹ 720,000 a year living in India, you will be taxed ₹ 145,160. That means that your net pay will be ₹ 574,840 per year, or ₹ 47,903 per month.
One easy way to pay no income tax is to have little or no taxable income. For tax year 2025, taxpayers receive a standard deduction of $15,750 (singles or married persons filing separately) or $31,500 (marrieds filing jointly). For heads of households, the standard deduction is $23,625 for tax year 2025.
It translates to INR 12 lakhs per annum, which is a substantial amount of money in India and can provide a comfortable standard of living, especially in smaller cities or towns.
As per section 207, a resident senior citizen (i.e., an individual of the age of 60 years or above) not having any income from business or profession is not liable to pay advance tax.
Surcharge and Cess:
Surcharge under the New Regime (for individuals below 60 years): Income over ₹50 lakh but under ₹1 crore: 10% of income tax payable. Income over ₹1 crore but under ₹2 crore: 15% of income tax payable. Income over ₹2 crore but under ₹5 crore: 25% of income tax payable.
According to government reports, while over 7 crore people file tax returns, only a fraction of them actually pay taxes because many fall below the taxable income threshold or use deductions to reduce liability.
States with No Income Tax in the United States. Last updated: May 2025. As of 2025, nine U.S. states levy no personal income tax: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming.