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Finance Bill

  • Category
    Socio-Economic Sector
  • Published
    31st Mar, 2020

Lok Sabha passed the Finance Bill 2020 without discussion as it was an "extraordinary situation" due to the coronavirus pandemic.

Context

Lok Sabha passed the Finance Bill 2020 without discussion as it was an "extraordinary situation" due to the coronavirus pandemic.

About

  • As per Article 110 of the Constitution of India, the Finance Bill is a Money Bill. The Finance Bill is a part of the Union Budget, stipulating all the legal amendments required for the changes in taxation proposed by the Finance Minister.
  • This Bill encompasses all amendments required in various laws pertaining to tax, in accordance with the tax proposals made in the Union Budget.
  • The Finance Bill, as a Money Bill, needs to be passed by the Lok Sabha — the lower house of the Parliament.
  • Rule 219:The Finance Bill finds its mention in Rule 219 of the Rules of Procedure of Lok Sabha.
  • The Speaker of the Lok Sabha is authorised to decide whether the Bill is a Money Bill or not. Also, the Speaker’s decision shall be deemed to be final.
  • Post the Lok Sabha’s approval, the Finance Bill becomes Finance Act.

The need of Finance Bill:

  • The Union Budget proposes many tax changes for the upcoming financial year, even if not all of those proposed changes find a mention in the Finance Minister’s Budget speech.
  • These proposed changes pertain to several existing laws dealing with various taxes in the country.
  • The Finance Bill seeks to insert amendments into all those laws concerned, without having to bring out a separate amendment law for each of those Acts.
  • For instance, a Union Budget’s proposed tax changes may require amending the various sections of the Income Tax law, Stamp Act, Money Laundering law, etc.
  • The Finance Bill overrides and makes changes in the existing laws wherever required.

Difference between a Money Bill and the Finance Bill:

  • A Money Bill has to be introduced in the Lok Sabha as per Section 110 of the Constitution. Then, it is transmitted to the Rajya Sabha for it-*`s recommendations.
  • The Rajya Sabha has to return the Bill with recommendations in 14 days. However, the Lok Sabha can reject all or some of the recommendations.
  • In the case of a Finance Bill, Article 117 of the Constitution categorically lays down that a Bill pertaining to sub-clauses (a) to (f) of clause (1) shall not be introduced or moved except with the President’s recommendation.
  • Also, a Bill that makes such provisions shall not be introduced in the Rajya Sabha.

    Under article 110(1) of the Constitution of India, a Financial Bill is deemed to be a Money Bill if it contains only provisions dealing with all or any of the following matters, namely:

      • The remission imposition, abolition, alteration or regulation of any tax
      • The regulation of the money borrowed the giving of any guarantee by the government, the amendment of the law with respect to any financial obligations undertaken or to be undertaken by the government.
      • The custody of the consolidated fund of India (CFI) or the contingency fund of India, the payment of money into or the withdrawal of money from any such fund.
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