The most productive sources of revenue in every federation are with the centre while the most expens...........

Indian Polity Centre - State Relations

The most productive sources of revenue in every federation are with the centre while the most expensive heads of expenditure are with the states. This makes states financially dependent on the center. Which of the following statements are correct about Financial relations of Center and state?

1. In the matter of taxation, the constitution recognizes no concurrent jurisdiction. Hence there is no subject who may be taxed both by the union and the state governments.

2. The share of states in tax revenue is decided by the NITI Aayog.

3. The residuary power of taxation belongs to the centre.

Select the code from below:

1&2 only

2&3 only

1&3 only

All the above

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Explanation:

The constitution grants the Union Parliament exclusive power to levy taxes on several items.
The state legislatures enjoy similar power with regard to several other specified items. In general, the Union Parliament levies taxes on items mentioned in the union list while the state legislatures levy taxes on items mentioned in the state list.
The residuary power of taxation belongs to the centre. It means that the subjects which have not been included either in the union or in the state list may be taxed only by the union government.
In the matter of taxation, the constitution recognizes no concurrent jurisdiction. Hence there is no subject who may be taxed both by the union and the state governments.