UPSC Prelims 1995 · General Studies
Question 51: Economy and Social Development
Agricultural income tax is assigned to the State Governments by
AnswerThe answer is (d).
Taxes on agricultural income are in the State List of the Seventh Schedule, so the Constitution itself gives the States the exclusive power to levy them. Parliament cannot tax agricultural income. The Finance Commission, the National Development Council and the Inter-State Council recommend, plan or advise; none of them assigns tax powers. Remember: agricultural income tax is a State subject by the Constitution.
Why each option is right or wrong
- (a) The Finance Commission recommends how taxes are shared; it does not assign tax powers.
- (b) The National Development Council is a planning body with no power to assign taxes.
- (c) The Inter-State Council is a coordination forum and cannot assign taxes.
- (d) Right: the State List of the Seventh Schedule gives States the power.
Explanation: written by UPSC Grade, not by UPSC.
Source: UPSC, Civil Services (Preliminary) Examination 1995, General Studies. UPSC's own paper isn't online; the words are from a published compilation. The paper on upsc.gov.in.