## Why the Constitution Matters for Tax
No tax can be imposed by mere executive whim. The Constitution of India is the supreme source of the power to tax.
## Article 265 — Authority of Law Required
> Article 265: "No tax shall be levied or collected except by authority of law."
This means:
- A tax must be backed by a statute passed by the legislature (Parliament or State Legislature).
- Both the levy (imposition) and the collection must be authorised by law.
- An executive order, circular, or notification alone cannot create a tax liability — there must be a parent Act.
## Article 246 — Distribution of Legislative Powers
India is a federal polity. The Constitution divides law-making power between the Centre and the States through Article 246, read with the Seventh Schedule.
The Seventh Schedule contains three Lists that describe the matters on which each legislature can make laws:
| List | Who can legislate? | Nature |
|---|---|---|
| List I — Union List | Parliament alone | Exclusive power of the Centre |
| List II — State List | State Legislatures alone | Exclusive power of the States |
| List III — Concurrent List | Both Parliament and State Legislatures | Both can legislate |
## Source of Income Tax — Entry 82 of the Union List
Entry 82 of List I (Union List) reads:
> "Taxes on income other than agricultural income."
This is the constitutional foundation of the Income-tax Act, 1961. Because Entry 82 sits in the Union List:
- Only Parliament can make laws on income tax (non-agricultural).
- Agricultural income is deliberately excluded from the Union's power — it falls to the States (which is why agricultural income is exempt under the Income-tax Act, but the State may tax it).
## Putting It Together
```
Constitution (Art. 265) → No tax without law
↓
Constitution (Art. 246 + Schedule VII, Entry 82, List I) → Parliament empowered
↓
Income-tax Act, 1961 (passed by Parliament) → Actual levy
↓
Income-tax Rules, 1962 + Notifications + Circulars → Operational detail
```