New Delhi/Gangtok, Feb. 29: Finance minister P. Chidambaram today announced an income-tax exemption for people of Sikkimese origin in the Himalayan state.

The income could be from any source in the state or by way of dividend or interest on securities. However, the exemption would not be available to any woman of the hill state who marries a non-Sikkimese.

The new tax sops would come into retrospective effect from April 1, 1990 and would accordingly apply to assessment year 1990-91 and subsequent assessment years.

Prior to 1989, there were no direct central taxes or income-tax in the Himalayan state. In 1989, the Centre imposed the income-tax on Sikkim. However, it was not implemented in the subsequent years.

The income-tax has been a major economic and political issue in the state and has also led to a government toppling in the past.

The Nar Bahadur Bhandari led Sikkim Sangram Parishad lost power in 1993 because of the issue. After that a Congress government-led by Sanchaman Limbu was in power for six months before the general elections were held in 1994.

The Bhutias and Lepchas had wanted an exemption from the central taxes, but when Bhandari refused to stand by them, the MLAs representing the two communities withdrew support. However, the central taxes were never enforced.

The state has its own income tax manual for residents. Income-tax in Sikkim is directly related to Article 371 (f) of the Constitution, which protects the old laws of the state.

The Sikkimese had always feared that the central laws would overrule the old laws in Sikkim, which includes the state income-tax manual as well. In that case, they would have had to pay income-tax at a rate applicable to the rest of the country.