WBCS.LIVE practice question

In India non-agricultural income tax is

Solve this multiple-choice question and check the correct answer with its explanation below.

Answer options

  1. levied by the Centre and fully distributed among the States.
  2. levied by the States.
  3. levied and appropriated by the Centre.
  4. levied by the Centre and shared with the States.

Correct answer and explanation

Correct answer: levied by the Centre and shared with the States.

Explanation: āœ… Correct Answer: D) levied by the Centre and shared with the States. šŸ“š Explanation: Non-agricultural income tax is levied and collected by the Union Government (Centre) but the proceeds are shared with the States based on the recommendations of the Finance Commission. This is an example of fiscal federalism in India where revenue is redistributed to maintain balanced development.