Article 274

Presidential Recommendation for Bills Affecting State Taxation Interests

Official heading: “Prior recommendation of President required to Bills affecting taxation in which States are interested”

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Source edition: The Constitution of India (as on 1 May 2026)
Source locator: Part XII, Article 274, printed page 161
Last human source-link check: Not yet checked
Last human legal review: Not yet reviewed

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1. In One Sentence

Requires the prior recommendation of the President before Parliament can introduce any Bill that alters taxes or duties in which States have a financial interest.

2. What It Means in Everyday Language

Article 274 is a vital constitutional shield protecting State finances from unilateral central legislative reduction.

No Bill or amendment can be introduced or moved in either House of Parliament without the prior recommendation of the President if it: (a) imposes or varies any tax or duty in which States are interested; (b) varies the meaning of "agricultural income" as defined in income tax law; (c) affects the principles of distribution of divisible taxes to States; or (d) imposes any Union surcharge under Article 271.

Clause (2) defines "tax or duty in which States are interested" as any tax whose net proceeds are wholly assigned to States or whose proceeds enter the divisible pool distributed to States.

This ensures that the Union Cabinet and the President formally evaluate the fiscal impact on the States before introducing tax legislation.

3. Practical Illustrative Example

Everyday Scenario:

A member of Parliament proposes an amendment to the Finance Bill that would reduce the base of personal income tax or restructure divisible corporation tax rates.

Core takeaway: Under Article 274(1), the amendment cannot even be moved in the Lok Sabha without the prior formal recommendation of the President.

Illustrative Notice: If an Act is inadvertently passed without this prior recommendation, the procedural defect can be cured upon receiving subsequent presidential assent under Article 255.

4. Important Limits, Qualifications & Exceptions

Article 274 protects the integrity of state revenue expectations in federal taxation.

Mandatory prior recommendation: Applies to all parliamentary bills affecting divisible or assigned taxes.
Agricultural income safeguard: Protects the constitutional definition of agricultural income against unilateral central changes.
Union surcharge coverage: Extends to any bill seeking to introduce or modify Article 271 surcharges.

5. Operative Constitutional Text

(1) No Bill or amendment which imposes or varies any tax or duty in which States are interested, or which varies the meaning of the expression “agricultural income” as defined for the purposes of the enactments relating to Indian income-tax, or which affects the principles on which under any of the foregoing provisions of this Chapter moneys are or may be distributable to States, or which imposes any such surcharge for the purposes of the Union as is mentioned in the foregoing provisions of this Chapter, shall be introduced or moved in either House of Parliament except on the recommendation of the President. (2) In this article, the expression “tax or duty in which States are interested” means— (a) a tax or duty the whole or part of the net proceeds whereof are assigned to any State; or (b) a tax or duty by reference to the net proceeds whereof sums are for the time being payable out of the Consolidated Fund of India to any State.

Transcription for reference; compare with the linked official editionNot yet verified by a human legal reviewer

6. Sources & Historical Assembly Deliberations

Assembly quotations are withheld until wording, dates, and attribution have been checked against the primary record.

Sources & Citation Metadata

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Constitutional TextThe Constitution of India (as on 1 May 2026)Cited PDF page
Government of India (Legislative Department, Ministry of Law and Justice) • Part XII, Article 274, printed page 161 • Human source-link check pending
Primary PDF accessed and transcribed with AI assistance on 14 October 2026. Formatting and amendment annotation markers are omitted; operative wording is retained. This is not human legal review. Later amendments and commencement notifications have not been comprehensively checked.

Human legal review is pending; compare the text with the cited editionNon-partisan educational resource