The question asks to identify the category of people exempted from income tax under Section 10(26) of the Income Tax Act.

Section 10(26) Income Tax Exemption

Section 10(26) of the Income Tax Act, 1961, provides specific income tax exemptions. This section grants exemption to the income of members of a Scheduled Tribe (ST) deriving from any source in the North-Eastern States or from outside India, subject to certain conditions.

Analyzing Exemptions Under Section 10(26)

• The exemption under Section 10(26) primarily targets the income of members belonging to Scheduled Tribes residing in specific geographical areas, particularly the North-Eastern regions of India.
• Evaluating the options based on the scope of Section 10(26):
  • Option 1 mentions Chhattisgarh, which is not the primary focus of this specific exemption clause.
  • Option 2 includes Scheduled Castes (SCs) and refers to 'Special Category States'. Section 10(26) specifically mentions Scheduled Tribes (STs).
  • Option 3 refers to 'Economically Backward Class', which is not relevant to Section 10(26).
  • Option 4 correctly identifies members of the Scheduled Tribes in the specific North-Eastern States of Manipur, Mizoram, Nagaland, and Tripura. This aligns with the legislative intent of Section 10(26) concerning tribal populations in these regions.

Therefore, members of the Scheduled Tribes in the States of Manipur, Mizoram, Nagaland, and Tripura are specifically covered under the income tax exemption provided by Section 10(26) of the Income Tax Act.