Article 269 of Constitution of India "Taxes levied and collected by the union but assigned to the States"
(1) The following duties and taxes shall be levied and
collected by the Government of India but shall be assigned
to the States in the manner provided in clause (2), namely:-
(a) duties in respect of succession to property other than
agricultural land;
(b) estate duty in respect of property other than
agricultural land;
(c) terminal taxes on goods or passengers carried by
railway, sea or air;
(d) taxes on railway fares and freights;
(e) taxes other than stamp duties on transactions in
stock-exchanges and futures markets;
(f) taxes on the sale or purchase of newspapers and on
advertisements published therein;
(g) taxes on the sale or purchase of goods other than
newspapers, where such sale or purchase takes place in the
course of inter-State trade or commerce;
(h) taxes on the consignment of goods (whether the
consignment is to the person making it or to any other
person), where such consignment takes place in the course of
inter-State trade or commerce.
(2) The net proceeds in any financial year of any such duty
or tax, except in so far as those proceeds represent
proceeds attributable to Union territories, shall not form
part of the Consolidated Fund of India, but shall be
assigned to the States within which that duty or tax is
leviable in that year, and shall be distributed among those
States in accordance with such principles of distribution as
may be formulated by Parliament by law.
(3) Parliament may by law formulate principles for
determining when a sale or purchase of [or consignment of]
goods takes place in the course of inter-State or commerce.
270. Taxes levied and collected by the Union and distributed
between the Union and the States.- (1) Taxes on income other
than agricultural income shall be levied and collected by
the Government of India and distributed between the Union
and the States in the manner provided in clause (2).
(2) Such percentage, as may be prescribed, of the net
proceeds in any financial year of any such tax, except in so
far as those proceeds represent proceeds attributable to
Union territories or to taxes payable in respect of Union
emoluments, shall not form part of the Consolidated Fund of
India, but shall be assigned to the States within which that
tax is leviable in that year, and shall be distributed among
those States in such manner and form such tie as may be
prescribed.
(3) For the purposes of clause (2), in each financial year
such percentage as may be prescribed of so much of the net
proceeds of taxes on income as does not represent the net
proceeds of taxes payable in respect of Union emoluments
shall be deemed to represent proceeds attributable to Union
territories.
(4) In this Article-
(a) "taxes on income" does not include a corporation tax;
(b) "prescribed" means-
(i) until a Finance Commission has been constituted,
prescribed by the President by order, and
(ii) after a Finance Commission has been constituted,
prescribed by the President by order after considering the
recommendations of the Finance Commission;
(c) "Union emoluments" includes all emoluments and pensions
payable out of the Consolidated Fund of India in respect of
which income tax is chargeable.