Constitution of India · Section Article 274
Prior recommendation of President required to Bills affecting taxation in which States are interested
Article 274 — Prior recommendation of President required to Bills affecting taxation in which States are interested
- Prior recommendation of President required to Bills affecting taxation in which States are interested.—(1) No Bill or amendment which imposes or varies any tax or duty in which States are interested, or which varies the meaning of the expression “agricultural income” as defined for the purposes of the enactments relating to Indian income-tax, or which affects the principles on which under any of the foregoing provisions of this Chapter moneys are or may be distributable to States, or which imposes any such surcharge for the purposes of the Union as is mentioned in the foregoing provisions of this Chapter, shall be introduced or moved in either House of Parliament except on the recommendation of the President. (2) In this article, the expression “tax or duty in which States are interested” means—
- (a) a tax or duty the whole or part of the net proceeds whereof are assigned to any State; or
- (b) a tax or duty by reference to the net proceeds whereof sums are for the time being payable out of the Consolidated Fund of India to any State.
Plain English Summary
This article states that if a proposed law (Bill) changes any tax or duty in a way that affects the states' share of money or how money is distributed to them, the President must give a prior recommendation before Parliament can consider it. This ensures that state interests are considered before major financial changes are made.
Key Points
- A Bill affecting taxes where states have an interest needs the President's recommendation.
- This applies to taxes assigned wholly or partly to a State, or taxes paid out of the Union's Consolidated Fund to a State.
- It also covers changes to how "agricultural income" is defined for income tax purposes and principles of state fund distribution.
- The Bill must be introduced in either House of Parliament only with the President's recommendation.
Why It Matters
It acts as a safeguard to protect the financial interests of the states by requiring central legislative action on matters that directly impact their revenue or financial distribution.
Landmark Judgements
No major landmark judgements.