Which one of the following taxes is not included in the Central Pool to be shared with the States according to the recommendations of Finance Commission of
India?

Correct option is C

The correct answer is (c) deSurcharge and Cess.
According to the recommendations of the Finance Commission of India, the Central Pool of Taxes that is shared with the states includes various taxes like Personal Income Tax, Corporate Profit Tax, and Excise Duties. However, Surcharge and Cess are not included in the divisible pool of taxes shared with the states. These are kept exclusively by the Central Government.
Personal Income Tax: This tax is included in the central pool and is shared with the states based on the recommendations of the Finance Commission. It is one of the key components of the divisible pool.
Corporate Profit Tax: Similar to personal income tax, corporate profit tax is also part of the central pool and is shared with the states.
Excise Duties: Central excise duties, except those on items like alcohol and petroleum products, are included in the divisible pool of taxes that are shared with the states.
Surcharge and Cess: Surcharges and cesses are levied for specific purposes (e.g., education, health) and are not included in the divisible pool. The revenue generated from these sources remains with the Central Government and is not shared with the states. This allows the central government to use these funds for targeted purposes without having to distribute them.
Information Booster:
● The divisible pool includes major taxes like Personal Income Tax, Corporate Tax, Customs Duties, and some Excise Duties. ● Surcharge and Cess are not part of the divisible pool and are retained by the central government, giving it flexibility in using these funds. ● The Finance Commission determines the percentage of the divisible pool that will be shared with the states, based on factors like population, area, and economic performance. ● States receive a share of the divisible pool to ensure fiscal balance and support regional development.