In the Constitution of India, the distribution of powers between the Union Government and the State Governments is provided in the Seventh Schedule. This schedule divides the subjects into three lists: the Union List, the State List, and the Concurrent List. The Union List consists of subjects on which only the Union Government can make laws, the State List consists of subjects on which only the State Governments can make laws, and the Concurrent List consists of subjects on which both the Union and State Governments can make laws.

The correct answer in this case is option 2: State. This means that taxes on agricultural income fall under the jurisdiction and authority of the State Governments. Therefore, the State Governments have the power to impose and collect taxes on agricultural income within their respective states.