A generally false perception among many Indians is that the Scheduled Tribes across the nation are exempt from the responsibility of paying their income taxes to the government. This is an incorrect perception. It is a fact though, that the scheduled tribes of Northeast India are exempted from paying income taxes, though indirect taxes like GST are collected from all.
Taxes are what builds a nation, and also sustains it. It should be a moral obligation on the part of all those that are required to pay taxes, to ensure that they do so, not looking at it from the prism of ‘extortion’ by the government. It should be the duty of every Indian to pay his/her income tax, if they are required to. However, when a section of Indians pay a portion of their hard earned and honest money as taxes, and at the same time, witness another section not doing so, only because they have the tag of a ‘tribe’ attached to them, it makes the former feel miserable. Not only is it blatantly saddening, but it is also a grave injustice to those who toil their entire lives and pay their taxes. A similar picture is seen playing out in the Northeast.
Section 10 (26) (a) of the Income-tax Act, 1961 provides that a person is entitled to exemption from income-tax if: (i) he is a member of a Scheduled Tribe as defined in Art. 366(25) of the Constitution, (ii) he is residing in any area specified in Part A or Part of the Table appended to paragraph 20 of the Sixth Schedule to the Constitution, or in the States of Arunachal Pradesh, Manipur, Mizoram, Nagaland and Tripura or Union- Territories mentioned in s. 10(26)(a) and; (iii) the income in respect of which exemption is claimed is income which accrues or arises to him from any source in the area, State or Union Territories mentioned in the section. This also includes the state of Meghalaya, however, the state does not explicitly find a mention in the clause as it was a part of the state of Assam back then. This exemption also applied to the Ladakh region of the erstwhile Jammu & Kashmir state. All such states and union territories were deemed to be ‘scheduled’ areas by the Constitution. It is worthy to be mentioned that the tribal’s of these states can avail this exemption in their ‘scheduled’ areas alone, and will be liable to pay taxes if they do not reside in the scheduled area.
Let’s make things clear at the very outset. Talking about ‘tribals’ and ‘taxes’ in the same breath, especially in the Northeast, is a tricky call. The non-tribals who reside here sincerely pay their taxes, however, the indigenous people of the region, notwithstanding the magnanimity of their wealth, have the luxury to not pay taxes, constitutionally. Of course, here too, there is massive disparity among the tribals themselves, and a large number of them continue to languish in poverty to this day. But truth be told, there are also those who have erected mansions for themselves, and continue to relish a life of riches, without paying a penny as income tax. Is this not injustice of the highest order towards their fellow Indian counterparts, who religiously pay their taxes?
Income tax slabs for resident individual below 60 years of age: 2019
| Taxable income slabs | Income tax rates and cess |
| Up to Rs 2.5 lakh | Nil |
| Rs 2,50,001 to Rs 5,00,000 | 5% of (Total income minus Rs 2,50,000) + 4% cess |
| Rs 5,00,001 to Rs 10,00,000 | Rs 12,500 + 20% of (Total income minus Rs 5,00,000) + 4% cess |
| Rs 10,00,001 and above | Rs 1,12,500 + 30% of (Total income minus Rs 10,00,000) + 4% cess |
For all Indians who do not belong to the Northeastern tribes, the above mentioned figures are tax slabs according to which an individual pays his/her tax. The honest taxpayers await every budget, which is presented in the Lok Sabha and hope for tax reliefs. Meanwhile, many tribals of the Northeast continue to be indifferent to any such changes in tax slabs, as they are simply not affected by it. A very logical and relevant demand of some taxpayers from the Northeast is to look at the economic and financial status of an individual and then judge whether or not he/she should be brought under the tax net. Many are government employees, work in high-income jobs, are successful businessmen and politicians; why should such people be exempted from paying taxes?
They are fully equipped to sustain themselves quite comfortably even after tax deductions. In Meghalaya, now that the NGT ban on rat-hole mining of coal has been lifted by the Supreme Court, the coal barons will once again see steep rise in income. They form the richest layer of people in the state. Not only do they employ children to mine coal, but they also have no scientific methodology to do so. As a cherry topping, they do not have to pay taxes. This results in pyramids of wealth for such households.
Imagine a situation where the well-to-do tribals would pay their income taxes. Would it not help families who are genuinely below the poverty line across the nation? Leave alone India, just how many poor families of the Northeast would be benefitting if the wealthy tribals are made to cough up taxes? We understand that when such exemptions were granted to the region in entirety, the state of the indigenous people was not at par with the rest of the country, financially. However, now that the benefits of these exemptions have begun bearing fruits, it is about time that this provision is phased out in a timely manner.
It is the need of the hour to begin tax collection from all such tribals who are financially equipped to do so. We do not expect the genuinely poor to pay their taxes, but a start must be made somewhere. And it must be made now! This constitutional inequality must be done away with, even if that brings with it harsh criticism. Initially, such a move would not be liked by the stakeholders who have grown to become status-quoists of the worst kind, who think that this luxury is going to continue forever.
