Constitution Section 285 — Exemption of property of the Union from State taxation

Part XII — FINANCE, PROPERTY, CONTRACTS AND SUITS — Miscellaneous Financial Provisions

Constitutional

Summary

Property owned by the central government is generally exempt from any tax that a state government or any local authority within a state tries to impose. However, Parliament can pass a law to change this rule and allow such taxes.

Until Parliament makes such a law, any state or local authority can continue to collect a tax on central government property if that property was already subject to that tax just before the Constitution came into effect. This is allowed only as long as that same tax continues to be charged in that state.

Official Text

(1) The property of the Union shall, save in so far as Parliament may by law otherwise provide, be exempt from all taxes imposed by a State or by any authority within a State.

(2) Nothing in clause (1) shall, until Parliament by law otherwise provides, prevent any authority within a State from levying any tax on any property of the Union to which such property was immediately before the commencement of this Constitution liable or treated as liable, so long as that tax continues to be levied in that State.