Delhi Deputy Chief Minister Manish Sisodia, who also holds finance portfolio, said that the decision will be implemented with immediate effect.
"Have ordered to make movie 'Neerja' tax-free. Decision to be implemented with immediate effect," Sisodia tweeted.
Uttar Pradesh Chief Minister Akhilesh Yadav too took to Twitter to make the announcement.
"'Neerja,' the movie will be tax free in UP," he wrote.
The movie is based on the life of young flight attendant Neerja Bhanot, who died trying to save the lives of 350-odd passengers on a hijacked Pan Am aircraft in 1986.
Directed by Ram Madhvani, the biographical film also stars Shabana Azmi, Shekhar Ravijani, Jim Sarbh and Yogendra Tiku in prominent roles.