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THE CONSTITUTION, MADE UNDERSTANDABLE

Article 280
Finance Commission

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26 Parts12 Schedules506 indexed article entries, including historical omissions
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Source edition: as on 1 May 2026. Omitted and struck-down reference entries remain labelled. Open the authoritative PDF ↗

Article 280 / Part XII

Finance Commission

included in edition
Plain languageOfficial textPurpose & sources
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THE PLAIN-LANGUAGE GUIDE

What does this mean?

The President constitutes a Finance Commission at the specified intervals to recommend tax distribution, grants and other assigned financial matters. It is different from the GST Council and State Finance Commissions.

Taxes, government funds, financial sharing, property, borrowing, contracts and legal proceedings.

IN EVERYDAY LIFE · ILLUSTRATIVE EXAMPLE

A Finance Commission recommendation needs to be distinguished from the action subsequently taken on it.

PURPOSE & CONTEXT

Why is this provision here?

Federal revenue sharing benefits from periodic, constitutionally mandated expert recommendations rather than only ad hoc bargaining.

Historical evidence

This Article number belongs to the original constitutional framework, but its present wording may include later amendments or substitutions. A provision-specific original Assembly debate has not been verified here. The explanation of function above is editorial inference from the text, not an attributed single motive of the framers. The original draft-making archive is a research resource, not proof of a particular historical reason. The later amendment records linked below document changes affecting this Article; their Bill statements explain those proposals, not necessarily every original clause or the complete present legal outcome.

The explanation of purpose is an editorial reading of the provision. A drafting motive is attributed only where a linked historical source supports it.

Limits, exceptions & reading carefully

Educational summary of the linked source text. Exceptions, provisos, implementing laws and applicable judgments must be read before applying it to a real case.

Amendment references
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Read the official constitutional text
280. Finance Commission.—(1) The President shall, within two years from the commencement of this Constitution and thereafter at the expiration of every fifth year or at such earlier time as the President considers necessary, by order constitute a Finance Commission which shall consist of a Chairman and four other members to be appointed by the President. (2) Parliament may by law determine the qualifications which shall be requisite for appointment as members of the Commission and the manner in which they shall be selected. (3) It shall be the duty of the Commission to make recommendations to the President as to— (a) the distribution between the Union and the States of the net proceeds of taxes which are to be, or may be, divided between them under this Chapter and the allocation between the States of the respective shares of such proceeds; (b) the principles which should govern the grants-in-aid of the revenues of the States out of the Consolidated Fund of India; [(bb) 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;] [(c) 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;] [(d)] any other matter referred to the Commission by the President in the interests of sound finance. (4) The Commission shall determine their procedure and shall have such powers in the performance of their functions as Parliament may by law confer on them.
Source-page notes · may concern neighbouring Articles

1. Ins. by the Constitution (Seventy-third Amendment) Act, 1992, s. 3 (w.e.f. 24-4-1993). 2. Ins. by the Constitution (Seventy-fourth Amendment) Act, 1992, s. 3 (w.e.f. 1-6-1993). 3. Sub-clause (c) re-lettered as sub-clause (d) by s. 3, ibid. (w.e.f. 1-6-1993).

Extracted from the Legislative Department’s May 2026 edition. Page footnotes may refer to neighbouring provisions; check their markers in the PDF. Inclusion in this edition does not by itself establish commencement or judicial effect.