Q. With reference to the ‘Finance Commission’ consider the following statements:
1.The Finance Commission is constituted by the Council of Ministers.
2.The Commission makes recommendations to the President of India on the distribution of tax proceeds between the Union and the States and the share of each state.
3.The Commission is appointed every five years.
Which of the statements given above are correct?

[A] 1 and 2 only

[B] 2 and 3 only

[C] 1 and 3 only

[D] 1, 2 and 3

Answer: B
Notes:

Explanation –

Statement 1 is incorrect. The Finance Commission is constituted by the President under Article 280 of the Constitution.

Statement 2 and 3 are correct. The Commission makes recommendations to the President of India on the distribution of tax proceeds between the Union and the States and the share of each state. The Commission is appointed every five years.

Source: ForumIAS