The primary duty of the Finance Commission of India is–

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To give the recommendations on distribution of tax revenue between the Union and States. It is the duty of the Finance Commission to make recommendations to the President as to— (i) The distribution of the net proceeds of taxes between the Union and the States which are to be or may be divided between them and the allocation between the States of the respective shares of such proceeds. (ii) The principles which should govern the grants-in- aid of the revenues of the States out of the Consolidated Fund of India. (iii) The measures needed to augment the Consolidated Fund of a State to supplement the resources of the Panchayats in the State on the basis of the recommendations made by the Finance Commission of the State. (iv) The measures needed to augment the Consolidated Fund of a State to supplement the resources of the Municipalities in the State on the basis of the recommendations made by the Finance Commission of the State. (v) Any other matter referred to the Commission by the President in the interests of sound finance.

The primary duty of the Finance Commission of India is–

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