(2)The net proceeds in any financial year of any such tax, except in so far as those proceeds represent proceeds attributable to Union territories, shall not form part of the Consolidated Fund of India, but shall be assigned to the States within which that tax is leviable in that year, and shall be distributed among those States in accordance with such principles of distribution as may be formulated by Parliament by law.[In article 269 of the Constitution, for clauses (1) and (2), the following clauses shall be substituted through Constitution (Eightieth Amendment) Act, 2000][The Constitution (Eightieth Amendment) Act, 2000, aims to implement the Tenth Finance Commission's recommendation to streamline the tax systems by collecting and distributing all taxes among the states and the federal government. Under the new scheme for devolution of revenue between the states and the Union, the states will receive grants instead of income taxes on railway passenger fares and twenty-six percent of the gross proceeds of Union taxes and duties instead of their current share of income tax, excise duties, and special excise duties.Also Refer]
