What is Article 285 of Indian Constitution – Defination & Meaning

Article 285: Exemption of property of the Union from State taxation (1) The property of the Union shall, save in so far as Parliament may by law otherwise
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Part XII – Finance, Property, Contracts and Suits

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Bare Acts Text

Article 285: Exemption of property of the Union from State taxation

  • (1) The property of the Union shall, save in so far as Parliament may by law otherwise provide, be exempt from all taxes imposed by a State or by any authority within a State.
  • (2) Nothing in clause (1) shall, until Parliament by law otherwise provides, prevent any authority within a State from levying any tax on any property of the Union to which such property was immediately before the commencement of this Constitution liable or treated as liable, so long as that tax continues to be levied in that State.
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Full Definition & Explanation

Article 285 of the Indian Constitution states that the property owned by the Union government is exempt from taxes imposed by any state or local authority. This means that states cannot levy taxes on Union property unless Parliament decides otherwise. The aim is to prevent state interference in the Union’s operations and ensure that the central government can function effectively without financial burdens from states. This exemption applies to various properties owned by the Union, including buildings, land, and other assets necessary for its functioning. However, there is an exception to this rule. Clause (2) of Article 285 allows states to continue taxing Union properties that were already liable for taxes before the Constitution came into effect. This provision ensures that states can still collect taxes on properties they were taxing previously. It creates a balance between respecting the Union’s authority and acknowledging existing tax arrangements that were in place before the Constitution was adopted. In practical terms, the impact of Article 285 is major for both the Union and state governments. By exempting Union properties from state taxation, it helps maintain the financial integrity of the central government. This exemption allows the Union to allocate resources efficiently for national development projects. On the other hand, states can continue to receive revenue from properties that were already subject to tax, ensuring they do not lose out on revenue streams that had been established previously.

Historical Context

Article 285 was included in the Constitution when it was adopted in 1950. It was designed to ensure that Union properties would remain unaffected by state taxes, thereby preserving the central government’s autonomy. Over the years, this article has not been significantly amended, but it has been interpreted in several Supreme Court cases. For instance, in the case of State of West Bengal v. Union of India (1963), the Supreme Court clarified the tax exemptions concerning Union properties, reinforcing the importance of Article 285 in maintaining the balance of power between the Union and states.

Key Features

– Union property is exempt from state taxes unless specified by Parliament.
– States can tax Union properties if they were taxed prior to the Constitution.
– The article aims to protect the functioning of the Union government.
– It helps maintain a balance of financial authority between Union and states.
– This article has been upheld in key Supreme Court rulings.

Importance & Impact

– Ensures the Union government can operate without state taxation burdens.
– Protects the financial interests of the central government effectively
– Allows states to keep taxing properties that were already liable.
– Supports national development projects by maintaining budget integrity
– Promotes cooperation between Union and state governments in financial matters.

Sample UPSC Question

Which of the following statements is correct regarding Article 285 of the Indian Constitution? Consider that: Article 285 of the Indian Constitution states that the property owned by the Union government is exempt from taxes imposed by any state or local authority in the context of Article 285. A) It allows states to tax Union properties without any restrictions. B) Union properties are exempt from state taxation unless specified by Parliament. C) Article 285 has been frequently amended since its adoption. D) It prevents any taxation on properties owned by state governments.

Answer

The correct answer is B. Article 285 states that Union properties are exempt from state taxes unless Parliament specifies otherwise. This provision preserves the financial independence of the Union government. Article 285 of the Indian Constitution states that the property owned by the Union government is exempt from taxes imposed by any state or local authority.

Key Takeaways

✓ Union properties are exempt from most state taxes.
✓ States can tax only properties already taxed before 1950.
✓ Article 285 helps maintain central government autonomy
✓ It balances financial power between Union and states.
✓ Key Supreme Court rulings support the article’s interpretation.

FAQs

Article 285 of the Indian Constitution states that the property owned by the Union government is exempt from taxes imposed by any state or local authority. This means that states cannot levy taxes on Union property unless Parliament decides otherwise. The aim is to prevent state interference in the Union’s operations and ensure that the central government can function effectively without financial burdens from states.

This provision ensures that states can still collect taxes on properties they were taxing previously. It creates a balance between respecting the Union’s authority and acknowledging existing tax arrangements that were in place before the Constitution was adopted. In practical terms, the impact of Article 285 is major for both the Union and state governments.

By exempting Union properties from state taxation, it helps maintain the financial integrity of the central government. This exemption allows the Union to allocate resources efficiently for national development projects. On the other hand, states can continue to receive revenue from properties that were already subject to tax, ensuring they do not lose out on revenue streams that had been established previously.

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