How is the distribution of net proceeds from taxes and duties determined in a financial year?
The distribution of net proceeds from taxes and duties in a financial year is determined by the percentage prescribed, which will not form part of the Consolidated Fund of India. This amount will be assigned to the states within which that tax or duty is leviable in that year and shall be distributed among those states in such manner and from such time as may be prescribed in the manner provided in clause (3). The term "prescribed" refers to the order issued by the President, either before a Finance Commission has been constituted or after considering the recommendations of the Finance Commission.