A non-taxable territory means a territory which is outside the taxable territory and taxable territory means the territory to which provisions of Finance Act, 1994 apply.
Taxable territory has been defined in sub-section 52 of section 65B. It means the territory to which the provisions of Chapter V of the Finance Act, 1994 apply i.e. whole of India excluding the state of Jammu and Kashmir. "Non-taxable territory" is defined in sub-section 35 accordingly as the territory other than the taxable territory.