The film, directed by Omung Kumar, is about Indian convict Sarabjit Singh, who was beaten to death in a Pakistani jail.
The story will be narrated from the perspective of Sarbjit's sister Dalbir Kaur, played by Aishwarya.
"Thank you @YadavAkhilesh for making our film #Sarbjit tax free in UP! The team and I are grateful and humbled by your kind gesture," film's producer Jackky Bhagnani posted on Twitter.
Bhagnani along with film's team including Richa Chadha, Omung and Darshan Kumaar had also met Chief Minister Akhilesh Yadav and his family earlier this month.
Uttar Pradesh government has given the tax free status to many films recently including 'Nil Battey Sannata', 'Neerja', 'Airlift', 'Bajrangi Bhaijaan', 'Humari Adhuri Kahaani' and others.