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      Question

      Which tax is levied by the Central Government but

      collected and appropriated by the States?
      A Corporation Tax Correct Answer Incorrect Answer
      B Stamp Duties Correct Answer Incorrect Answer
      C Taxes on Agricultural Income Correct Answer Incorrect Answer
      D Professional Tax Correct Answer Incorrect Answer
      E Customs Duty Correct Answer Incorrect Answer

      Solution

      • This is based on the division of financial powers under the Indian Constitution (Seventh Schedule).
        • Stamp Duties on documents  (except those specified in the Union List) fall under the  State List . However,  Stamp Duties on certain financial instruments  (like cheques, bills of exchange, etc.) are levied under the  Union List (Article 268) . As per Article 268, these duties are  levied by the Centre but collected and appropriated by the States  in which they are levied.
        • Corporation Tax is levied and collected by the Centre.
        • Taxes on Agricultural Income are levied and collected by States.
        • Professional Tax is levied and collected by States (subject to a ceiling).

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