Which one of the Following statements regarding the levying collecting and distribution of Income Ta...........

Indian Polity Centre - State Relations

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Which one of the Following statements regarding the levying, collecting and distribution of Income Tax is correct?

1. The Union levies, collects and distributes the proceeds of Income Tax between itself and the States.

2. The Union levies, collects and keeps all the proceeds of income tax to itself.

3. The Union levies and collects the tax but all the proceeds are distributed among the States.

Select the correct answer using the Codes given below:

1 Only

2 Only

3 only

None of the above

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Explanation:

Statement 1 is correct and 2 and 3 are incorrect because distribution of tax structure is divided into following types:
Taxes Levied, Collected and Retained by the Centre
Taxes Levied by the Centre but Collected and Appropriated by the States:
Taxes Levied and Collected by the Centre but Assigned to the States:
Taxes Levied and Collected by the Centre and Compulsorily Distributed between the Centre and the States:
Taxes Levied and Collected by the Centre and may be distributed between the Centre and the States:
Taxes Levied and Collected and Retained by States