Corporation tax

1. Corporation tax is a tax imposed on the net income or profit of corporations (companies). 2. According to the Union List (List I) in the Seventh Schedule of the Constitution of India, 'Taxes on income other than agricultural income' (Entry 82) falls under the legislative competence of the Parliament of India (the Union). Corporation tax (Entry 85) is also explicitly mentioned as a Union subject. 3. Therefore, Corporation tax is levied by the Union Government. 4. Article 270 of the Constitution (as it stood amended around 1995 and subsequently) deals with taxes levied and collected by the Union and distributed between the Union and the States. However, Article 271 allows Parliament to levy surcharges on certain taxes (including corporation tax) for the exclusive purpose of the Union. While the base tax might be shared based on Finance Commission recommendations, the power to levy rests with the Union, and importantly, certain components or the tax itself can be considered to belong exclusively to the Union for levy purposes. Option (D) states it is levied by the Union and belongs to it exclusively. This reflects the Union's exclusive power to levy the tax, even if proceeds might be shared later under Article 270. Compared to other options, (D) best captures the constitutional status of the levy itself.