Which one of the following statements regarding the levying, collecting and distribution of Income Tax is correct?

1. The question asks about the levying, collecting, and distribution of Income Tax in India. 2. According to Article 270 of the Constitution of India (as it stood after amendments relevant by 1999 and currently), taxes on income (other than agricultural income) are levied and collected by the Union government. 3. The net proceeds of income tax (except for proceeds attributable to Union territories or taxes levied for the purposes of the Union, like surcharge) are mandatorily distributed between the Union and the States in a manner prescribed by the President after considering the recommendations of the Finance Commission. 4. Option (A) correctly states that the Union levies, collects and distributes the proceeds of income tax between itself and the States. 5. Option (B) is incorrect because the proceeds (excluding surcharge etc.) are shared. 6. Option (C) is incorrect because the Union also retains a share. 7. Option (D) is incorrect because the basic income tax proceeds are shared; surcharge levied on income tax is exclusively for the Centre (Union) and is not shared with the States.