Which one of the following taxes is not included in the Central Pool to be shared with the States according to the recommendations of Finance Commission of India ?
Personal Income Tax
Corporate Profit Tax
Surcharge and Cess
Excise Duties
Answer is Right!
Answer is Wrong!
This question was previously asked in
UPSC CDS-2 – 2024
Finance Commissions recommend the vertical devolution (sharing) of Union taxes between the Union government and the states. The divisible pool of taxes typically includes major central taxes like Personal Income Tax, Corporate Tax, and Union Excise Duties (now largely subsumed under GST, whose division is also recommended). However, Surcharges and Cesses levied by the Central Government are generally not part of this divisible pool. They are usually levied for specific purposes and accrue solely to the Central Government, unless explicitly included in the divisible pool by specific legislation or Finance Commission recommendation for a particular cess/surcharge (which is rare).