Consider the following statements: In India, stamp duties on financial transactions are 1. levied and collected by the State Government 2. appropriated by the Union Government. Which of these statements is/are correct?
- AOnly 1
- BOnly 2
- CBoth 1 and 2
- DNeither 1 nor 2Correct
Explanation
The correct answer is D because both statements are incorrect according to Article 268 of the Indian Constitution.
Stamp duties on financial transactions like bills of exchange, promissory notes, and transfer of shares are levied by the Union Government, not the State Government. Therefore, statement 1 is wrong.
Regarding collection and appropriation, these duties are collected and kept by the State Governments within which such duties are leviable. They do not go to the Union Government. Therefore, statement 2 is also wrong.
In summary, for financial transactions, the Power to Levy belongs to the Union, while the Power to Collect and Appropriate belongs to the States.
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