- Constitutional Provision: Article 280 under Part XII
- Nature: It is Quasi Judicial Body
- Constituted by: President of India
- Composition: Chairman +4 members
- Authority to Decide Qualification: Parliament
- Tenure: Specified by the President
- Reappointment: Eligible
- Power of Civil Court: As per the Code of Civil Procedure, 1908.
- Make a Recommendation to the President about
- Distribution of net tax proceeds between the centre and state.
- Principles for grants in aid to the states by Centres
- Evaluating the rise in the Consolidated Fund of the State to allocate resources for local bodies.
- Other financial matters referred to it by President
| Note – Recommendations of the Finance Commission are only advisory and not binding on the Government. |
State Finance Commission
- Constituted by the Governor every 5 years under Article 243.
- Reviews financial position of local bodies.