Consider the following statements: 1. The corporations or the companies created by the Central government are immune from state taxation. 2. The property and income of local authorities situated within a state are not exempted from the Central taxation. Which of the statements given above is/are correct? |ForumIAS

Q. Consider the following statements:
1. The corporations or the companies created by the Central government are immune from state taxation.
2. The property and income of local authorities situated within a state are not exempted from the Central taxation.
Which of the statements given above is/are correct?

[A] 1 only

[B] 2 only

[C] Both 1 and 2

[D] Neither 1 nor 2

Answer: B

Notes:

Exp) Option b is the correct answer.

Statement 1 is incorrect. As corporations or the companies created by the Central government are separate legal entities, they are not immune from state or local taxation. At the same time, the property of Centre is exempted from all taxes imposed by a state or any authority within a state like municipalities, district boards, panchayats and so on. But the Parliament is empowered to remove this ban.

Statement 2 is correct. The property and income of local authorities situated within a state are not exempted from the Central taxation.

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