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Share of central taxes from 2026
March 3 , 2025
8 hrs 0 min
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- The government is looking to cut central tax revenues that it shares with states.
- The Finance Commission of India makes recommendations on tax sharing along with other aspects of centre-state fiscal relations.
- The Arvind Panagariya-led panel will submit its recommendation by October 31, with an aim of getting it implemented from the financial year 2026-27.
- The central government is likely to recommend a reduction in the share of tax revenue going to states to at least 40% from the current 41%.
- The 1% swing in the states’ share of the tax revenue could give the central government about Rs 3,500 crore.
- The share of taxes going to the state governments has increased from 20% in 1980 to 41% now.
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