Actual Article
Article 386: Special provision as to income-tax
Until other provision is made by Parliament by law, the President may by order direct that all or any of the provisions of the law relating to income-tax as applicable to the taxable territories immediately before the commencement of this Constitution shall apply to the corresponding areas of any Part B State, subject to such exceptions and modifications as the President may specify in the order.
UPSC Notes for Article 386
Explanation:
- Income Tax Provision: Article 386 grants the President the power to apply income-tax laws, which were in effect in the taxable territories before the Constitution, to the corresponding areas of any Part B State.
- Presidential Authority: Allows the President to specify exceptions and modifications to the income-tax laws as necessary until Parliament enacts a new law.
Key Points:
- Continuity in Taxation: Ensures continuity in the application of income-tax laws during the transition period.
- Temporary Provision: This power is temporary and will remain until Parliament enacts appropriate legislation.
- Flexibility: Provides flexibility to the President to adapt and modify income-tax laws to suit the needs of Part B States.
Important Cases and Commissions Related to Article 386
Cases:
- No landmark Supreme Court cases specifically interpreting Article 386, as it primarily deals with the transitional application of income-tax laws.
Commissions:
- Various Taxation and Finance Commissions: Have reviewed the application and adaptation of income-tax laws during the transition to the new constitutional framework.
Important Reports Related to Article 386:
- Reports by the Finance Ministry and Law Commission: Discuss the historical context and implications of applying pre-constitutional income-tax laws to Part B States.
Previous Year Prelims Questions Related to Article 386
- What does Article 386 of the Indian Constitution provide for?
A. Establishment of new tax laws
B. Application of existing income-tax laws to Part B States
C. Powers of the President during an emergency
D. Special provisions for the financial administration of States Correct Answer: B. Application of existing income-tax laws to Part B States - Under Article 386, who has the authority to direct the application of income-tax laws to Part B States?
A. The Prime Minister
B. The Chief Justice of India
C. The President
D. The Parliament Correct Answer: C. The President - According to Article 386, until when does the President have the authority to apply income-tax laws to Part B States?
A. Indefinitely
B. Until Parliament makes other provisions by law
C. For a maximum period of five years
D. Until the next general election Correct Answer: B. Until Parliament makes other provisions by law
Previous Year Mains Questions Related to Article 386
- Discuss the significance of Article 386 in ensuring the continuity of income-tax laws during the transition to the new constitutional framework. How does this provision contribute to financial stability in the states specified in Part B of the First Schedule?
- Evaluate the role of the President under Article 386 in applying and modifying income-tax laws for Part B States. How does this provision ensure a smooth transition and consistency in taxation?
- Analyze the impact of Article 386 on the financial administration of Part B States. How did this transitional provision facilitate the continuity and adaptation of income-tax laws during the constitutional transition?
Additional Insights:
- Financial Stability: Article 386 plays a crucial role in maintaining financial stability during the transition to the new constitutional framework by ensuring the continuity of income-tax laws.
- Presidential Authority: Highlights the central role of the President in adapting and applying income-tax laws to suit the needs of Part B States during the transition period.
- Transitional Provisions: Reflects the importance of having transitional provisions to manage the shift from the pre-constitutional financial order to the new constitutional framework, ensuring continuity and consistency in taxation.
Understanding Article 386 is crucial for UPSC aspirants as it provides insights into the constitutional provisions for maintaining financial stability and continuity in taxation during the transition to the new constitutional framework. This knowledge is essential for both preliminary and main examinations, offering a comprehensive understanding of the mechanisms ensuring the effective application and adaptation of income-tax laws within the Indian Constitution.