Q. Consider the following statements about the Constitutional Provisions regarding Taxation:

1. The Parliament can reduce a tax or abolish it.
2. The Parliament cannot increase the tax.
3. Central and state governments  have concurrent power of taxation.
4. The government has the right to levy and charge taxes on individuals and organizations and it does not need to be backed by a law.

Which of the above is/are correct?
Answer: Only 1 & 2
Notes: The government can levy taxes on individuals and organizations only if authorized by law from Parliament or state legislature. Parliament can reduce or abolish taxes but cannot increase them. India has a three-tier taxation system—central, state, and local—defined in the VII Schedule of the Constitution, which does not allow concurrent taxation powers for central and state governments.

This question is part of UPSC Daily 20 MCQ Series Course on GKToday Android app.