THE DRAFT CONSTITUTION 221
THE GAZETTE OF INDIA EXTRAORDINARY, FEB. 26,1948 253
tax, except in so far as those proceeds represent proceeds attributable to States for the time being specified in Part II of the First Schedule or the saxes payable in respect of Union emoluments, shall not form part of the revenues of India, but 5 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 from such time as may be prescribed.
(3) For the purposes of clause (2) of this article : 10 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 15 States for the time being specified in Part II of the First Schedule.
(4) In this article—
(a) “taxes on income” includes any sum levied 20 by the Government of India in lieu of any tax on income as referred to in clause (a) of the proviso to article 266 of this Constitution but does not include a cor- poration tax;
(b) “prescribed” means— 25
(i) until a Finance Commission has been constituted, prescribed by the Presi- dent by order, and
(ii) after a Finance Commission has been constituted, prescribed by the Presi- 30 dent by order after considering the recommendations of the Finance Com- mission.
(c) “Union emoluments” includes all emolu- ments and pensions payable out of the 35 revenues of India in respect of which in- come-tax is chargeable.
Surcharge on 252. Notwithstanding anything contained in certain duties articles 250 and 251 of this Constitution, Parliament and taxes for may at any time increase any of the duties or taxes 40 purposes of referred to in those articles by a surcharge for pur- the Union. poses of the Union and the whole proceeds of any such surcharge shall form part of the revenues of India.