What is Article 279 of Indian Constitution – Defination & Meaning

Article 279: Calculation of “net proceeds”, etc. (1) In the foregoing provisions of this Chapter, “net proceeds” means in relation to any tax or duty the
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Article Number

279

part

Part XII – Finance, Property, Contracts and Suits

Status

Active

Bare Acts Text

Article 279: Calculation of “net proceeds”, etc.

  • (1) In the foregoing provisions of this Chapter, “net proceeds” means in relation to any tax or duty the proceeds thereof reduced by the cost of collection, and for the purposes of those provisions the net proceeds of any tax or duty, or of any part of any tax or duty, in or attributable to any area shall be ascertained and certified by the Comptroller and Auditor-General of India, whose certificate shall be final.
  • (2) Subject as aforesaid, and to any other express provision of this Chapter, a law made by Parliament or an order of the President may, in any case where under this Part the proceeds of any duty or tax are, or may be, assigned to any State, provide for the manner in which the proceeds are to be calculated, for the time from or at which and the manner in which any payments are to be made, for the making of adjustments between one financial year and another, and for any other incidental or ancillary matters.
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Full Definition & Explanation

Article 279 of the Indian Constitution provides a framework for calculating the ‘net proceeds’ from taxes and duties. This article primarily affects the financial operations of both the Central and State governments. The term ‘net proceeds’ refers to the total amount collected from a tax or duty, after subtracting the costs involved in its collection. This ensures that the revenue that actually contributes to government funds is clearly defined, making budget planning more transparent and accurate. The Comptroller and Auditor-General of India plays a key role in this process, as they certify the net proceeds, ensuring accountability and reliability in financial reporting. This article also allows the Parliament or the President to create laws that specify how these proceeds should be calculated. It gives room for adjustments between financial years and outlines how payments will be made. For instance, if a new tax is introduced or an existing tax is revised, the law can stipulate how these changes affect the allocation of funds. This flexibility is critical for managing revenue, especially when financial conditions change, such as during economic downturns or booms. The impact of Article 279 extends to local governance as well, as it indirectly influences the funds available for municipal bodies. By determining how much revenue is available from various taxes, local governments can better plan their budgets for public services. Therefore, understanding this article is necessary for anyone interested in how Indian fiscal policies operate and how they affect citizens on a day-to-day basis.

Historical Context

This article primarily affects the financial operations of both the Central and State governments. The term ‘net proceeds’ refers to the total amount collected from a tax or duty, after subtracting the costs involved in its collection. This ensures that the revenue that actually contributes to government funds is clearly defined, making budget planning more transparent and accurate. The Comptroller and Auditor-General of India plays a key role in this process, as they certify the net proceeds, ensuring accountability and reliability in financial reporting.

Key Features

– Defines ‘net proceeds’ from taxes and duties after collection costs.
– Certifies net proceeds via the Comptroller and Auditor-General of India.
– Allows Parliament or President to regulate calculation methods.
– Facilitates adjustments between financial years for effective budgeting.
– Impacts local governance by determining available revenue for municipalities.

Importance & Impact

– Ensures accurate calculation of taxes, promoting financial transparency
– Empowers local governments by clarifying available funds for services
– Supports financial planning through adjustments in tax revenue calculations
– Establishes accountability via the Comptroller and Auditor-General’s certification
– Facilitates legislative flexibility in managing tax and duty proceeds

Sample UPSC Question

Which of the following statements about Article 279 is correct? A. It defines how tax proceeds are calculated. B. It allows the Supreme Court to amend tax laws. C. It does not involve the Comptroller and Auditor-General. D. It is not applicable to state governments. Select the correct answer from the options above.? Analyze these options carefully in light of the constitutional distribution of legislative and executive powers.
(a) 1 and 2 only
(b) 2 and 3 only
(c) 1 and 3 only
(d) 1, 2 and 3

Answer

The correct answer is A. Article 279 explicitly defines how the net proceeds from taxes and duties should be calculated. It ensures that the costs of collection are deducted from the total tax collected, providing a clear framework for revenue management.

Key Takeaways

✓ Article 279 defines how net proceeds from taxes are calculated.
✓ The Comptroller and Auditor-General certifies tax revenue calculations.
✓ Parliament can regulate the manner of tax proceeds calculation.
✓ Adjustments between years help manage financial planning effectively.
✓ It influences the funding available for local government services.

FAQs

Article 279 of the Indian Constitution provides a framework for calculating the ‘net proceeds’ from taxes and duties. This article primarily affects the financial operations of both the Central and State governments. The term ‘net proceeds’ refers to the total amount collected from a tax or duty, after subtracting the costs involved in its collection.

It gives room for adjustments between financial years and outlines how payments will be made. For instance, if a new tax is introduced or an existing tax is revised, the law can stipulate how these changes affect the allocation of funds. This flexibility is critical for managing revenue, especially when financial conditions change, such as during economic downturns or booms.

The impact of Article 279 extends to local governance as well, as it indirectly influences the funds available for municipal bodies. By determining how much revenue is available from various taxes, local governments can better plan their budgets for public services. Therefore, understanding this article is necessary for anyone interested in how Indian fiscal policies operate and how they affect citizens on a day-to-day basis.

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Pramod Pal Founder and Editor-in-Chief

Pramod is the Founder and Editor-in-Chief of StudyHub. He holds a Master's degree and is currently pursuing a Ph.D. in Geology, alongside more than 7+ years spent building and verifying competitive exam content for Indian aspirants. He leads StudyHub's editorial process across Indian Polity, the Constitution, Indian Economy, History, Geography, Science, and the platform's other subject areas — checking every article against primary sources (bare act text and Gazette notifications for constitutional topics, government and Economic Survey data for economy content, standard reference material elsewhere) and flagging it for re-verification whenever a relevant amendment, policy, or data update makes an earlier version outdated.
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