Finance Commission of India

A constitutional authority known as the Finance Commission is responsible for allocating specific revenue resources between the Union Government and the State Governments. It was created by the Indian President in accordance with Article 280 of the Indian Constitution. It was developed to lie forth the terms of the Center's and the States' financial dealings. It started off in 1951. The wait is over for 80g deduction limit.

The Fifteenth Finance Commission has welcomed Shri Ajay Narayan Jha as a member. On February 1st, 2021, the 15th Finance Commission published a report titled "Finance Commission in COVID Times."

Know more about section 12a.

A Finance Commission of India must be established by the President within two years of the start of the Indian Constitution and then every five years after that.

The Commission's responsibility will be to advise the President on the following:-

  (a) the allocation of the Union's and the States' respective parts of the net profits of taxes that are to be, or may be shared among, them and the distribution of those proceeds among the States;

  (b) the guidelines that should be followed for making grants to the States from the Consolidated Fund of India's income;

  (c) any other problem that the President refers to the Commission in the interest of prudent financial management;

  (d) the Commission will set the rules and have the authority that Parliament may grant them by legislation as they carry out their duties.

The President may also appoint the Finance Commission before the five-year period is through if he deems it essential.

Each chamber of Parliament must be presented with the President's presentation of the Finance Commission's proposal and its justification.

Composition of Finance Commission of India

Chairman of the Finance Commission and Members

(a) The Chairman is in charge of the Commission's operations and serves as its leader. He needs to have prior public affairs expertise.

(b) Four Members

(c) The legislative standards for the Commission members' backgrounds and processes of selection are set by the Parliament.

Requirements for the Finance Commission's chairman and members

 (a) The four members should be or have been qualified to serve as High Court judges, or they should have expertise in administration, financial understanding, or both.

(b) The President of the nation makes all appointments.

(c) Members' reasons for disqualification.

(d) Discovered to be mentally ill, determined to have committed a horrible deed, or if a conflict of interest exists.

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