Finance Bills are of 3 types, viz. Finance bill category I, Finance bill category II and Money Bill
The Finance Bill is a Money Bill that gives effect to the taxation proposals contained in the Budget. It also lays out the government’s financial plan for the following financial year.
As per Rule 219 of the Rules of Procedure of Lok Sabha, a Finance Bill is a bill ordinarily introduced in each year to give effect to the financial proposals of the Government for the following financial year and includes a Bill to give effect to supplementary financial proposals for any period.
The Finance Bill is introduced in the Lok Sabha immediately after the presentation of the annual budget, as directed by Article 110 (a) of the Constitution of India. The Finance Bill becomes the Finance Act for the year concerned after it is passed by the parliament and receives assent of the President.
A Budget usually contains tax proposals for the upcoming financial year. The proposed changes pertain to existing laws dealing with various taxes in the country. The Finance Bill makes required amendments to the tax laws concerned, thus obviating the need to bring out a separate amendment law in each case. It does so by over-riding provisions in the existing laws.
Finance Bills can be divided into three categories, viz. Finance bill category I, Finance bill category II and Money Bill.
Finance bills category I and II contain provisions on taxation and expenditure. On the other hand, a Bill may be deemed as a Money Bill only if it has provisions pertaining to Consolidated Fund of India and results in imposition, abolition or alteration of central or state taxes.
A finance bill is a Money Bill, as per Article 110 of the Constitution of India, but a Money Bill need not be a finance bill.
Money Bills can only be introduced in the Lok Sabha. The Speaker of the Lok Sabha certifies the bill as a money bill and subsequently sends it to the Rajya Sabha. The upper house can recommend amendments, but does not have the privilege of amending the money bills.
Rajya Sabha needs to return the bill to the Lok Sabha within 14 days, or the bill is considered as having being passed by both the houses in the form as was originally passed by the lower house of Parliament. If the Rajya Sabha recommends any amendments, it is left to the discretion of the Lok Sabha to accept or reject the recommendations.
Source: NDTV Profit
