The correct answer is option 'D', which states that only the union government has powers when it comes to income tax. Let's discuss why this is the case.

1. Background on Income Tax:
Income tax is a direct tax imposed on individuals and entities based on their income or profits. It is an important source of revenue for governments to fund various welfare programs, infrastructure development, and public services.

2. Division of Powers in India:
In India, the distribution of powers between the union government (central government) and state governments is defined by the Constitution. The Constitution specifies the subjects on which each level of government can make laws and exercise authority. This distribution of powers is outlined in the Seventh Schedule of the Indian Constitution.

3. Union List:
Under the Seventh Schedule, there are three lists: the Union List, the State List, and the Concurrent List. The Union List contains subjects on which only the union government has the exclusive power to legislate. Income tax is one such subject listed in the Union List, specifically mentioned in Entry 82 of List I.

4. Exclusive Power of Union Government:
Since income tax is listed in the Union List, it means that only the union government has the authority to levy and collect income tax. The state governments do not have the power to impose income tax on individuals or entities.

5. Other Taxes:
While income tax is exclusively under the purview of the union government, the state governments have the power to levy and collect other taxes such as sales tax, value-added tax (VAT), entertainment tax, property tax, etc. These taxes fall under the State List mentioned in the Seventh Schedule.

6. Coordinated Efforts:
Although the power to levy income tax lies with the union government, the administration and collection of income tax are carried out by both the union and state governments in a coordinated manner. The Central Board of Direct Taxes (CBDT), a part of the union government's Department of Revenue, oversees the administration of income tax throughout the country. State governments provide support and assistance in the collection of income tax by sharing information and facilitating compliance.

7. Conclusion:
In conclusion, income tax is a subject exclusively under the jurisdiction of the union government in India. While the state governments have the power to levy and collect other taxes, income tax is not one of them. It is important to understand this division of powers to have a clear understanding of the taxation system in India.