Devolution Flashcards
Which article of the Indian Constitution outlines the distribution scheme for net tax proceeds between the Centre and the States?
Article 270 outlines the distribution scheme for net tax proceeds collected by the Union government between the Centre and the States.
What types of taxes are included in the divisible pool?
Shared taxes in the divisible pool include:
Personal Income Tax
Central Goods and Services Tax (GST)
Centre’s share of the Integrated Goods and Services Tax (IGST)
What is a surcharge, how is surcharge in India
A surcharge is a tax imposed on top of the existing tax liability. For example, there is a 10% surcharge on income exceeding ₹50 lakhs and a 15% surcharge on income exceeding ₹1 crore.
What are the exclusions from the divisible pool of taxes?
Cess and surcharge are not included in the divisible pool of taxes.
How often is the Finance Commission constituted?
Every five years.
- What percentage of the Union government’s gross tax receipts for 2024-25 is estimated to come from cess and surcharge?
Answer: 23%.
When was health cess introduced and how much is it?
2018 and 4%
What is income distance
‘Income distance’ is the distance of a State’s income from the State with highest per capita income which is Haryana.
- How does the State’s share compare to the recommendation made by the 15th Finance Commission?
Answer: It is significantly lower than the 41% share recommended by the 15th Finance Commission.
- What percentage of revenue do States generate compared to their expenditure?
Answer: States generate about 40% of their revenue but bear around 60% of the expenditure.
What is vertical and horizontal devolution?
Vertical Devolution is the Devolution of Taxes of the Union to States and Horizontal Devolution is the Allocation
Between the States.
Under which Article of the Indian Constitution is the Finance Commission established?
Article 280.
Which act specifies the qualifications for the chairman and other members of the commission.
Finance Commission (Miscellaneous Provisions) Act, 1951
Who was appointed as the chairman of the 15th Finance Commission?
NK Singh
When was the first Finance Commission of India established?
In 1951.
