The Centre-State Relation

Total Questions: 52

41. Under which Article of the Constitution of India, Taxes are levied and collected by the centre but distributed between the centre and the States? [Jharkhand P.C.S. (Pre) 2016]

(a) Article 268
(b) Article 269
(c) Article 270
(d) Article 271

Correct Answer: (c) Article 270

Solution:According to Article 270 of the Indian Constitution, Taxes on income other than agricultural income are levied and collected by the government of India and distributed between the Union and the States.

42. Which one of the following taxes is imposed and charged by the Union, but is divided into Union and the States? [U.P. U.D.A./L.D.A. (Pre) 2006]

(a) Corporation Tax
(b) Taxes on items except for agriculture income
(c) Taxes on railway fares and freights
(d) Custom
(e) All of the above

Correct Answer: (e) All of the above

Solution:Article 270 deals with the taxes or duties that are levied and collected by the Union but proceeds thereof are divided between Union and State. Presently all taxes and duties referred to in the union list, except the duties and taxes referred to in Article 268, 269, and 269A, are imposed and charged by the Union but divided into the union and the states.

43. Consider the following statements - [I.A.S. (Pre) 2003]

In India, stamp duty on financial goods deals are:

1. Imposed and collected by state government

2. Regulated by the union government

Which of the following is/are correct?

(a) Only 1
(b) Only 2
(c) Both 1 and 2
(d) None of these

Correct Answer: (d) None of these

Solution:According to Article 268, stamp duty on financial goods deals is imposed by the Union Government but collected and appropriated by the State Government.

44. Consider the following statements- [U.P.P.C.S. (Mains) 2006]

In India taxes on transactions in Stock-Exchanges and Futures Markets are:

1. Levied by Union.

2. Collected by the State Government.

Which of the following is/are correct?

(a) Only 1
(b) Only 2
(c) Both 1 and 2
(d) None of these

Correct Answer: (d) None of these

Solution:The seventh Schedule of the Constitution is for the distribution of powers between the Union and the States. There are 3 lists under this—Union List, State List, and Concurrent List. According to the question, the tax imposed on the stock market and futures market belongs to the Union List. However, under Article 270 of the Constitution, such taxes are levied and collected by the Union but assigned to the states.

45. Under constitutional provision of tax assignment in India, which of the following is a tax exclusively imposed and collected by the states? [Jharkhand P.C.S. (Pre) 2021]

(a) Income Tax
(b) Land Revenue
(c) Corporation Tax
(d) GST

Correct Answer: (b) Land Revenue

Solution:

Land Revenue is a tax exclusively imposed and collected by the states. Land Revenue is included in the state list of the seventh schedule of the Indian constitution under entry 45. Entry 45 includes Land revenue, including the assessment and collection of revenue, the maintenance of land records, survey for revenue purposes and records of rights and alienation of revenues.

46. Provision for Discretionary Grant which may be given by Central government to States is given under which Article of the Constitution? [Chhattisgarh P.C.S. (Pre) 2022]

(a) Article 275
(b) Article 281
(c) Article 282
(d) Article 228

Correct Answer: (c) Article 282

Solution:

According to the Indian Constitution Article 282, the union or a state may take any grants for any public purpose, notwithstanding that the purpose is not one with respect to which parliament or legislature of the state, as the case may be, may make laws.

47. Is a State of the Indian Union empowered under the Constitution to take foreign loans directly? [U.P.P.C.S. (Mains) 2012]

(a) Yes
(b) No
(c) Yes, but from international organizations only
(d) Yes, but only with the permission of the Reserve Bank of India

Correct Answer: (b) No

Solution:

According to Article 293 (1), the executive power of a State extends to borrowing within the territory of India upon the security of the Consolidated Fund of the State within such limits, if any, as may from time to time be fixed by the Legislature of such State by law and to the giving of guarantees within such limits. So it is obvious under the Constitution of India that the State cannot obtain foreign loans directly.

48. Agriculture Income Tax is assigned to the State Government by- [I.A.S. (Pre) 1995]

(a) The Finance Commission
(b) The National Development Council
(c) The Inter-State Council
(d) The Constitution of India

Correct Answer: (d) The Constitution of India

Solution:

In the 7th schedule of the Constitution, in state list entry 45 taxes on agricultural income are listed. In Article 274 of the Constitution, the provision is stipulated for taxation of agricultural income in which the State is interested.

49. Main agency to resolve the fiscal disputes between the Centre and States is - [U.P.P.C.S. (Pre) 1995]

(a) Supreme Court
(b) Law Minister
(c) Finance Minister
(d) Finance Commission

Correct Answer: (a) Supreme Court

Solution:

Supreme Court is the main agency to resolve the fiscal disputes between the centre and the states. Supreme Court deals with the above matter under Article 131 of the Constitution of India. The finance commission's core responsibility is to recommend the sharing of taxes between the centre and states.

50. Under which of the following taxes the total amount payable by an individual is limited by the Constitution? [U.P.P.C.S. (Mains) 2004, U.P.P.C.S. (Mains) 2002]

(a) Corporation tax
(b) Estate Duty
(c) Succession Duty
(d) Tax on profession, trade, and callings

Correct Answer: (d) Tax on profession, trade, and callings

Solution:

Article 276 (2) of the Constitution specifies that the total amount payable in respect of any person to the State or to any municipality, district board, local board, or other local authority in the State by way of taxes on professions, trades, callings and employments shall not exceed two thousand and five hundred rupees (Rs. 2,500) per annum after the 60th Amendment Act, 1988 in place of Rs. 250.

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The Centre-State Relation

41. Under which Article of the Constitution of India, Taxes are levied and collected by the centre but distributed between the centre and the States? [Jharkhand P.C.S. (Pre) 2016]

42. Which one of the following taxes is imposed and charged by the Union, but is divided into Union and the States? [U.P. U.D.A./L.D.A. (Pre) 2006]

43. Consider the following statements - [I.A.S. (Pre) 2003]

44. Consider the following statements- [U.P.P.C.S. (Mains) 2006]

45. Under constitutional provision of tax assignment in India, which of the following is a tax exclusively imposed and collected by the states? [Jharkhand P.C.S. (Pre) 2021]

46. Provision for Discretionary Grant which may be given by Central government to States is given under which Article of the Constitution? [Chhattisgarh P.C.S. (Pre) 2022]

47. Is a State of the Indian Union empowered under the Constitution to take foreign loans directly? [U.P.P.C.S. (Mains) 2012]

48. Agriculture Income Tax is assigned to the State Government by- [I.A.S. (Pre) 1995]

49. Main agency to resolve the fiscal disputes between the Centre and States is - [U.P.P.C.S. (Pre) 1995]

50. Under which of the following taxes the total amount payable by an individual is limited by the Constitution? [U.P.P.C.S. (Mains) 2004, U.P.P.C.S. (Mains) 2002]

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