Section 124B(1) in Tamil Nadu District Municipalities Act, 1920
(1)The Finance Commission referred to in Article 243-1 of the Constitution shall review the financial position of the municipalities and [Third Grade Municipalities] and make recommendations to the Governor as to-(a)the principles which should govern,-(i)the distribution between the State Government and the municipalities and the [Third Grade Municipalities] [Substituted for the words 'Town Panchayat' by the Tamil Nadu District Municipalities (Amendment) Act, 2004 (Tamil Nadu Act 23 of 2004) w.e.f. 14th June 2004.] of the net proceeds of the taxes, duties, tolls and fees leviable by the State Government which may be divided between them and the allocation between the municipalities and the [Third Grade Municipalities] [Substituted for the words 'Town Panchayat' by the Tamil Nadu District Municipalities (Amendment) Act, 2004 (Tamil Nadu Act 23 of 2004) w.e.f. 14th June 2004.] of their respective shares of such proceeds;(ii)the determination of the taxes, duties, tolls and fees which may be assigned to or appropriate, by the municipalities and the [Third Grade Municipalities] [Substituted for the words 'Town Panchayat' by the Tamil Nadu District Municipalities (Amendment) Act, 2004 (Tamil Nadu Act 23 of 2004) w.e.f. 14th June 2004.] from the Consolidated Fund of the State;(iii)The grants-in-aid to the municipalities and the [Third Grade Municipalities] [Substituted for the words 'Town Panchayat' by the Tamil Nadu District Municipalities (Amendment) Act, 2004 (Tamil Nadu Act 23 of 2004) w.e.f. 14th June 2004.].(b)the measures needed to improve the financial position of the municipalities and the [Third Grade Municipalities] [Substituted for the words 'Town Panchayat' by the Tamil Nadu District Municipalities (Amendment) Act, 2004 (Tamil Nadu Act 23 of 2004) w.e.f. 14th June 2004.];(c)any other matter referred to the Finance Commission by the Governor in the interest of sound finance of the municipalities and the town panchayats.
