Who recommends the distribution of the net proceeds of taxes between the Union government and the state governments?

### Concept & Constitutional Function The Constitution of India provides a specific mechanism for the equitable distribution of financial resources (tax revenues) between the central government (Union) and the states. ### Step-by-Step Solution * Article 280 of the Indian Constitution mandates the creation of a Finance Commission. * One of the primary duties of the Finance Commission is to evaluate the state of finances and recommend the sharing of taxes between the Center and the States (vertical devolution) and also among the states themselves (horizontal devolution). * While the Ministry of Finance executes the budget, and NITI Aayog (formerly Yojana Aayog/Planning Commission) deals with policy and planning, the *statutory recommendation* for tax distribution is solely the purview of the Finance Commission. ### Exam Strategy & Shortcut Any question regarding the *distribution or sharing of tax proceeds* between the Union and States in India points directly to the Finance Commission (Article 280). ### Common Pitfall Mistaking the Ministry of Finance (which collects the taxes) or NITI Aayog (which advises on economic policy) as the body that *decides* the sharing formula. The Finance Commission is specifically constituted for this purpose. ### Final Answer Therefore, the correct answer is **Finance Commission**.